Insurance for OHS penalties

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OHS law is generally structured in a positive way and based on the logic that people will act appropriately if there is a deterrent for doing the wrong thing.  This logic applies to many levels of public administration, commerce and psychology.

Some years ago, this logic was challenged during some consultation I undertook for a prison workshop.  It was necessary to assess the guarding of a machine not just for the “accidental” injuries but for malicious and purposeful injuries.  This established a lower common denominator than in the majority of workplaces. 

In this work environment to some inmates, the penalty for harming oneself and others was worth the risk.  It did not deter everyone.

Recently, an allegation has come to the attention of SafetyAtWorkBlog that a company providing OHS compliance advice to small businesses in Australia is also offering insurance coverage for OHS penalties.  Should a business proprietor be financially penalized by the OHS regulator for a breach of the legislation, the business proprietor would pay an excess of around $2000 and the (unnamed) insurance company would pay the balance.

Such a service places a $2,000 cap on OHS penalties and would remove a major reason behind penalties for unsafe practices and workplaces.

This is of concern to OHS professionals as we “trade” on the importance of OHS having a strong business case as well as a social benefit.

SafetyAtWorkBlog would be interested to hear from anyone who may have come across such insurance options elsewhere or have an opinion on such an option.

Longford explosion anniversary, Andrew Hopkins and a new book

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October 2008 was the tenth anniversary of the explosion at Longford gas plant in Australia that resulted in many injuries, two fatalities and almost two weeks of severely interrupted gas supply to the State of Victoria.

The Longford explosion at an Exxon-Mobil site resulted in a Royal Commission, an OHS prosecution and a record fine.  Recently it was often invoked in comparison to the Varanus Island pipeline explosion in Western Australia.

Professor Andrew Hopkins, sociologist with the Australian National University, was studying safety management systems well before the Esso Longford explosion but it was that major disaster that added international prominence, and a substantial extra workload, to Andrew.  Other than domestic acclaim, in July 2008, the European Process Safety Centre declared Andrew winner of the EPSC Award for 2008.  He is the first person outside of Europe to win this award.  It is believed that Andrew was formally presented with the award at the EPSC conference earlier this month.

Andrew has a refreshing perspective on safety management systems, partly because he has brought a sociologist’s eye to management decisions; his vision is not clouded by the OHS baggage through which many other analysts struggle.

Andrew’s next book due out this month through CCH Australia is Failure to Learn The BP Texas City refinery disaster and could have him travelling frequently the United States to offer his wisdom.

SafetyAtWorkBlog is working on a new interview with Andrew when he returns to Australia but in the meantime, a 2000 interview with Andrew is available as a page on this blog.  The interview was conducted at a book launch in September 2000 for Lessons From Longford.

Professor Andrew Hopkins (right) receiving the award from Christian Jochum, Director of the European Process Safety Centre
Professor Andrew Hopkins (right) receiving the award from Christian Jochum, Director of the European Process Safety Centre

Australian Greens Senator speaks on OHS legislation

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Senator Rachel Siewert spoke on Australia’s review of OHS law on 13 October 2008.The Senator summarised the statistical reason for OHS legislation (included here as statistics is a popular issue at SafetyAtWorkBlog), as well as the societal context.

Australian Greens Senator for Western Australia Rachel Siewert
Australian Greens Senator for Western Australia Rachel Siewert

“The importance of occupational health and safety is obvious from looking at even just a few key statistics. In 2004 Access Economics estimated that there were 4,900 work related deaths each year in Australia. The ABS calculated that 690,000 employees suffered from a work related injury or illness in 2006. The Productivity Commission found that, in 2004, workplace deaths, injuries and illnesses cost the economy over $30 billion a year. These figures go to the economic and, importantly, the personal and social costs of workplace injuries and deaths. Behind each of those numbers is a person with a family, workmates, friends and a community.”

Senator Siewert reiterates the timetable for the initial report of the National Review into Model Occupational Health and Safety Laws is due by the end of this month but also identified a plethora of inquiries, agreements and discussions that will also inform the Australian government’s ultimate decision on OHS law. She supports the concept of tripartism:

“We believe that building on best practice in OH&S in this country and around the world is to implement genuine tripartism and independence. On these criteria, this legislation is too skewed in favour of governments and to the detriment of other key stakeholders in OH&S regulation-that is, employees and employers. [The Robens report in the 1970s]. It went on to recommend that statutory recognition of joint consultative practices-including government, employees and employers-need to underpin the new approach.”

But also makes the pitch for broader representation:

“If you agree with this approach-and all of Australia’s OH&S laws are based on this concept-then you also have to acknowledge the importance of genuine participation of employers and employees through a representative structure. The NOHS Commission did recognise this and was established as a statutory corporation with a membership structure incorporating employee and employer representatives. Its functions included formulating policies and strategies relating to OH&S matters, reviewing and making recommendations for the making of laws relating to OH&S matters, researching OH&S matters and conducting inquiries into OH&S matters.”

My recollection of NOHSC was that representation remained the domain of employer associations, trade unions and the government. Independent OHS specialist were few and far between. Given the dreadfully poor rate of union membership in Australia, it would have been more progressive for the Senator to nominate independent OHS specialists and to propose a 25% ratio of represntation for each of the representative groups so that (hopefully) apolitical opinion could be provided on a subject that should be apolitical. (And I still think an OHS Ombudsman is a practical and useful concept.)

In 2004, in its report into national workers compensation and occupational health and safety frameworks, the Productivity Commission made a number of recommendations relevant to the National Occupational Health and Safety Commission, including having a specific objective of achieving national uniform OH&S regulation and joint funding from the states. We note that this bill does implement these recommendations. The Howard government, however, instead of implementing those recommendations, once it got its chance by taking control of the Senate, abolished the commission. Prior to being able to abolish the commission, the previous government had already reduced its funding significantly. Between 1996 and 2005 the then government slashed the budget by over $4 million. We believe OH&S was never much of a priority for the Howard government.

The Senator places the proposed Safe Work Australia authority in a particularly awkward position:

“Safe Work Australia fits somewhere in the middle of the NOHSC and the ASCC. It continues the practice of being tripartite-although inexplicably downgrading the representation of employee and employer representatives-and, while more independent of government than the ASCC, is significantly less independent than the NOHSC.”

Other Greens’ concerns are:

  • reduced representation
  • vague definitions on ‘authorising body” or those associations who become represnetatives
  • excessive and unnecessary ministerial control, including veto
  • two-thirds majority decisions
  • insufficient funding for research

It would be interesting to hear the thoughts of other minor parties although the position of Family First may change in line with varying economic situations.

Varanus Island Report released

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On 10 October 2008, the Western Australian Mines and Petroleum Minister, Norman Moore, released the final report into the Varanus Island pipeline explosion.  Sadly due to legislative restrictions the report is not being made available in an electronic edition accessible through the internet.  However, hard copies can be requested from the government.

Recent media statements indicate that “the immediate physical cause of the gas explosion at the island’s gas production facility operated by Apache Energy Ltd was the rupture of the 12-inch gas sales pipeline.”

Some media reports mention the dreaded n-word – negligence.  Apache Energy has stated that investigations into the 

Varanus Island explosion were premature and based on an incomplete investigation 

Contrary to most incident investigation techniques known to SafetyAtWorkBlog, Apache Energy says that it will continue to investigate in order to determine the “root cause”.  

Since the incident, there has been a change to a conservative State government so the statements contain a political edge.  The current Minister says that the terms of reference were too narrow and did not allow for investigation into “regulatory oversight” however deficiencies in this area were illustrated through media reports in the weeks following the incident.

The Minister has not ruled out ordering a  “a full and independent investigation into this issue… at a later date” but I suspect only if there were political benefits rather than safety benefits.  There are a considerable number of voices supporting a broader inquiry from unions and industry groups

The report is said to identify the following three contributing factors:

  • ineffective anti-corrosion coating at the beach crossing section of a 12-inch sales gas pipeline, due to damage and/or dis-bondment from the pipeline;
  • ineffective cathodic protection of the wet-dry transition zone of the beach crossing section of  a 12-inch sales gas pipeline on Varanus Island; and
  • ineffective inspection and monitoring by Apache Energy of the beach crossing and shallow water section of the pipeline.

Mr Moore stated that

“Under the safety case regime, the operator is required to identify hazards and assess risks to health and safety and to implement control measures to reduce those risks. The ongoing inspection, monitoring and maintenance of control measures are associated with those risks and the management regime. The report has indicated that Apache and its co-licensees may have committed offences under two pipeline Acts.”

A Senate inquiry is looking into the economic impact of the Western Australian gas crisis and the State Government’s response to the incident.

New presenteeism survey figures

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Frequently I receive audio media releases from the US about a range of workplace safety matters.  These releases are scripted and can sometimes sound corny but within them is a usually a useful nugget of information.

The latest one I received concerns presenteeism and mental health so, being so close to World Mental Health Day, I thought it is worth mentioning.  The audio release is from Cigna Health Care, an American insurance company, and can be heard by clicking 35580_09ny08-0039-_cigna-w

Cigna has a couple of fact sheets in support of the survey findings and an article specifically concerning mental health and wellness which may be worth a look. 

An earlier posting on presenteeism is available and I recommend going to the World Health Organisation, UN or ILO sites for more independent information.