Category: due diligence

HIP Royal Commission – Gross Negligence and Accountability

Little of the recent commentary on the findings of the Royal Commission into the Home Insulation Program (HIP) have mentioned the opinion of the Royal Commissioner Ian Hanger that the Australian Government acted in a “grossly negligent” manner.  Such a comment deserves considerable analysis by a specialist lawyer but it remains a remarkable criticism in terms of obligations under OHS/WHS laws.

Commissioner Hanger wrote:

“To encourage inexperienced young people to work in an environment where there was a risk of defective electrical wiring, and allow them to install conductive material was, in my opinion, grossly negligent. It is no answer for the Australian Government to say that it was the responsibility of those young people’s employers to protect them.” (para 5.2.20, emphasis added)

Gross negligence has been equated to the term “reckless endangerment” included in Australia’s Work Health and Safety laws.  One legal website site says that:

“Reckless endangerment is the offense of engaging in activity that has a disregard for risks with foreseeably dangerous consequences.”

Commissioner Hanger’s comments certainly seem to fit reckless endangerment as the risks, not only of electrocution but simply from working in domestic roof spaces, were well known.

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HIP Royal Commission – Leadership and Culture

The findings of the Royal Commission into the Home Insulation Program (HIP) deserve a great deal of analysis by the safety profession. Amongst the lessons are important ones concerning leadership, culture and consultation.

The final report identifies major deficiencies in the design and administration of a major project regardless of the politics and jurisdictional argy-bargy.  Although many are disappointed the report did not identify any big name politicians as the major evildoer, Commissioner Ian Hanger is brutally forthright when necessary.

In the introduction of the report, there are several references to what a “competent administration” would have done, clearly implying that the government of then Prime Minister, Kevin Rudd, was incompetent in the management of HIP. In fact Hanger writes:

“It ought also to have been obvious to any competent administration that the injection of a large amount of money into an industry that was largely ‘unregulated’ would carry with it the risk of rorting and other unscrupulous behaviour.” (para 1.1.19)

“It ought to have been obvious, to any competent administration, that such an exponential increase in work to be undertaken would require a similarly huge increase in the workforce to do it.” (1.1.9)

“The reality is that the Australian Government conceived of, devised, designed and implemented a program that enabled very large numbers of inexperienced workers—often engaged by unscrupulous and avaricious employers or head contractors, who were themselves inexperienced in insulation installation—to undertake potentially dangerous work. It should have done more to protect them.” (1.11.18)

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HIP Royal Commission – Risk Registers

Cover of ReportoftheRoyalCommissionintotheHomeInsulationProgramSafetyAtWorkBlog has written previously about the evidence of Margaret Coaldrake to the Royal Commission into the Home Insulation Program (HIP) given at the public hearings and also the occupational health and safety role of risk management and risk registers. The release of the Royal Commission’s final report on 1 September 2014 provides further details on a risk management process that is common to all large projects.

Commissioner Ian Hanger spent considerable time on the issue of the risk register as this was one of the crucial elements in the project’s whole decision-making process up to Ministerial level.

Risk Register

Commissioner Hanger was scathing of the risk management process that not only ignored the risk of worker fatalities but purposely dropped this risk from the register. He was unforgiving in his criticism of Margaret Coaldrake. He criticised her judgement. In working with her Minter Ellison colleague Eric Chalmers:

“it was up to [Coaldrake] to make sure that she and the people working with her were qualified to provide the service that Minter Ellison consultants had been retained to do.” (para 7.11.15)

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Fear of exposure rather than pride in their work

“Due diligence” is an established business management concept that only recently came to be applied to occupational health and safety (OHS) in Australia through the Work Health and Safety (WHS) harmonisation process.  It’s credibility comes from the Corporations Act, principally, but also Consumer Protection and, partly, Environmental laws.

iStock_000015900242SmallThe attention given by OHS/WHS professionals and senior executives to due diligence is already changing how workplace safety is managed in a positive way but recently the

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Ministerial responsibility in finance but not in workplace safety

Ministerial responsibility seems to be advantageous in financial policies but irrelevant to workplace safety going by actions by Australia’s political leaders.  This week former senior (Labor) parliamentarians, Mark Arbib, Peter Garrett, Greg Combet and Kevin Rudd, will be fronting the Royal Commission into Home Insulation to explain their lack of due diligence on workplace safety matters.  This is only a week after the Federal (Liberal) Government released a Commission of Audit report that promoted ministerial responsibility.

The popular perspective is that these ministerial decision-makers will be held to account for the deaths of four young workers but this is unlikely to occur because State occupational health and safety (OHS) laws establish a direct OHS relationship between employers and employees and the senior politicians did not employ anyone who was installing home insulation.  The argument at the Royal Commission mirrors the chain of responsibility concept except that in work health and safety (WHS) legislation, government ministers are not covered by the definition of ‘officer’ and therefore have less OHS/WHS responsibility that anyone heading up a company or organisation.

Labour lawyer

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“It’s easier but it isn’t easy” – OHS leadership tips from IOSH

The Institute of Occupational Safety and Health (IOSH) recently uploaded a swag of videos to YouTube, ostensibly, to promote its upcoming conference.  One video asks if it is harder or easier to inspire leadership on OHS matters.  Most speakers believe it is easier because:

  • there is a stronger social expectation of higher safety standards,
  • managing people is more inclusive,
  • technology allows more effective communication,
  • leaders are coaches,
  • people have a greater awareness of how to be safe.

Some believe it is harder because:

  • it is more difficult to have faith in corporate leaders,
  • companies have a more complex structure of accountability and responsibility,
  • there is greater cynicism of corporate leaders due to the GFC in 2007.

One speaker at IOSH’s upcoming conference says “It’s easier but it isn’t easy” acknowledging past improvements and future challenges.

The IOSH videos are promoting the conference but there is food for thought in all of them.  Conferences in Australia have tried similar teaser ads (some including the author) for conferences but not to the extent that IOSH has through YouTube.  As safety conferences seem to be fading in both length and influence in Australia, such videos will become rarer but, as with rarity, the content may become more valuable.

Kevin Jones

“Safety is paramount”, “safety is our number one priority” = bullshit cliches

After a major incident or at an Annual General Meeting, it will be common to hear a senior executive state something like “Safety is our number one priority”.  This is unrealistic and almost absurd because even in the most worker-friendly company, the continued existence of that organisation is the real and ultimate goal.  Most corporate leaders believe these safety clichés because they think they reflect their own values but the statements are misrepresenting occupational health and safety (OHS) and need to be questioned.

Corporate leaders who say such statements are not hypocrites.  They are more likely to not understand the consequences of their statements.  If safety really is the number one priority, an executive should be able or expected to close the company if its work cannot be conducted safely.  If a company’s people are paramount to the success of the company, how does it handle an accusation of bullying against a manager?  Which of the people does the Board or the company choose to keep and which to lose?  Should it keep the “evil” sales representative because the rep is its most effective salesperson or sack the rep because he or she is abusive?

These are executive decisions that need to be worked through if any company is to develop an effective operational culture that truly values the safety of its workers.  It is vital that the reality behind the statements is analysed and acted upon, or perhaps such statements should not be uttered in the first instance.

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