Citi’s 2015 Safety Spotlight shines light on some OHS areas Reply

[This article from 2015 was previously password-protected and is now available to all]

Recently a couple of media outlets referred to a report produced by Citi into workplace safety issues related to the top 100 companies on the Australian stock exchange.  The report, “Safety Spotlight: ASX100 Companies & More” (not available online), provides a useful insight to the ASX100 companies’ safety performance but Citi also undertook several thematic analyses which are curious but not always as helpful as expected. (A blog article on a previous Citi report is HERE)

In support of some of the statements at a recent seminar after the Australasian Reporting Awards, Citi found that shareholders and investors now expect to read about occupational health and safety performance in company reports and that the omission of OHS mentions seems suspicious.  Safety can be an indication of the quality of a company’s management and these findings could be a major boost for the issue of OHS accountability and transparency.

The Spotlight report records fatalities for the ASX100 companies since the 2005 financial year and over that time the annual fatality rate has declined however the report acknowledges that recent issues may indicate past statistical deficiencies when one considers the increased attention on work-related suicides and work-related vehicle incidents.

The benefit of having fatality figures, brief descriptions and trend data for each company in this report shows the amount of attention to detail Citi has applied for this report.  This data  is likely to be useful in deciding about investments but the use for safety professionals is limited, however OHS professionals are not the target audience.

Frequency Rates

It is useful to note that 94 of the 127 companies (Yes, it’s still called the ASX 100) reported LTIFR and/or TRIFR as indicators of safety performance. Citi acknowledges that TRIFR “may be a better measure of harm.”

The need for a consistent metric is shown in the report’s footnotes by the plethora of frequency rates.  A sample includes

  • All Injury Frequency Rate
  • Recordable Case Rate
  • Recordable Injury Frequency Rate
  • Recordable Case Injury Frequency Rate
  • Lost Workday Case Frequency Rate

Some of the titles may be exactly the same metric but even when looking at Annual Reports it is difficult to tell. Frequency rates are, largely, a lag indicator but even consistency in these measures would greatly help the comparison of OHS performance.

Thematic Research

The thematic research report areas for this year included

  • Developing vs Developed Country Injury Statistics,
  • Process Safety and Major Hazard Risk,
  • Safety and Executive Remuneration,
  • Workplace Impacts of Obesity, and
  • Western Australian Inquiry into FIFO (Fly-In, Fly-Out) Mental Health.

Some companies operate globally and safety data varies from country to country. Citi suggests that this may be due to differences in risk perception, the presence of workers compensation schemes, reporting consistency and different workforce demographics and fitness, amongst other factors. This variability affects the interpretation of global OHS performance statistics.

Major Hazards

On the issue of major hazards, Citi found that major companies are increasing their focus on process safety and major hazard risk but wondered whether investors could ask why these companies are acting now rather than years earlier when the risk levels were similar. This type of reaction after major incidents is common and is one of the major frustrations of the OHS profession.  Tragedy motivates change much quicker than leadership.

Recently a colleague mentioned their own frustration with safety professionals and academics who continue to use disasters such as Piper Alpha, Challenger and Three Mile Island, as illustrations of systemic failure.  The theoretical relevance is obvious but to most of the OHS students and graduates such events are of historical interest mainly as these occurred before many were even born.  It is useful to remember that even those children now in their teenage may be unaware of the events of 9/11 even though they may be aware of the consequences of that event.

Citi also makes the point that the measurement of personal safety in this industry sector can provide a false sense of security as it misses the major process disaster risk, a perspective borne out by others in the oil and gas sector.

Someone in Citi has been reading some of the recent work of Andrew Hopkins and others when it writes:

“Executive remuneration schemes may act against management of major hazard risk.”

Executive Remuneration

One section of this report that has generated a lot of attention concerns executive remunerations and how these are linked to safety. Most companies continue to rely on personal safety figures but Citi noted that at least four companies are incorporating safety leadership in this area.

The criteria used with safety as a remuneration factor, as with the safety performance metrics mentioned above, are messy and contradictory.  Some of the criteria used by Australian companies include:

  • injury rates,
  • reportable spills,
  • risk reduction actions on time,
  • personal initiatives and leadership, and
  • occupational health exposures.

Four companies made no mention of safety influencing CEO remuneration!

Obesity

One of the more curious analytical themes was Workplace Impacts of Obesity.  The Citi report highlights this through references to solid data from the Australian Institute of Health and Welfare, Australian Bureau of Statistics and others but suggest no OHS solutions other than noting the increase in wellness  and healthy lifestyle programs.

This section is an odd inclusion as it is difficult to see how these statistics could affect the decision making on investments.  The issue is more a quality of life issue that has curiosity value rather than any corporate indicator.

Mental Health FIFO

This topic is a more logical fit to the Citi report as many of the resource companies that use FIFO labour are also part of the ASX100.  More specific OHS information is available from the recent Western Australian inquiry report and through watching the current Queensland inquiry but, as Citi notes, the crucial factor in this sector will be the governments’ responses to the inquiries.  One of these is due in mid-September 2015 and will be a good gauge of the Federal Government’s attitude to the prevention of harm from a psychosocial matter.

In Citi’s advice to investors it mentions potential changes in the following areas:

  • Rosters, Construction and Contractors,
  • Reporting of Suicides, and Inclusion of Mental Health in WHS Requirements, and
  • Accommodation Facilities.

The OHS challenge of this labour practice in this industry sector is to apply a core OHS principle – to eliminate harm, at the source – companies may need to restructure their operations, and change fundamental perspectives on the use of labour. Given that many suggest that the recent mining boom in Australia has ended, the issue of FIFO mental health has diminished except that as the mining labour force has entered other industry sectors, the consequences of FIFO may manifest in the new occupations or, at least, affect a worker’s productivity.

The latest Safety Spotlight is a fascinating document, particularly as the data covers a decade from 2005 and is not limited to Australian safety events but includes global incidents under the “control” of Australian companies.

It is hoped that Citi avoids the temptation of rolling this decade across the next Spotlights (if there are any) as anchoring the data in 2005 allows for trend data across a range of economic fluctuations such as booms and the Global Financial Crisis.  This will be doubly important as, as Citi mentions several times during the report, safety may be directly affected by the varying fortunes of the ASX100 companies.

Kevin Jones

 

The youth and gender agenda 1

The Safety Institute’s National Convention was given a youthful injection this morning by the presentation of Dr Jason Fox (pictured below, with beard). He challenged our thinking and our occupational health and safety (OHS) future, even though the sound quality was not as good as it could be leading to some of his words being missed.

20160907_101018One of the most visible changes in this conference is the presence of women on the speaker panels.  Each of these panels has illustrated and reinforced the need to change from the usually safety conference speakers, who are experts and important to listen to, away from the male-based (but changing) stereotype of the safety profession to which many speakers have referred. The SIA is trying to provide gender diversity but it, like so many other organisations, is not there yet in its transition from old to new and from past to future.

Panel member Jen Jackson (pictured) was not included as a speaker but she showed enough thoughtful contribution and personality that a presentation on safety communication would have been useful. She complemented the speakers and panel well and her response to her exposure to the safety profession would have generated a fresh external perspective.

I have written before that I think some speakers, experts and academics should be read rather than heard. Dr Fox is a vibrant speaker but twenty minutes, as Drew Rae has pointed out in a comments sections of this blog, does not allow nuance, discussion or debate. I have read some of Dr Fox’s GameChanger book and that media format allows for reflection and thought but try to see Dr Fox present on change first. He is a terrific multimedia knowledge package..

I can’t blog about the content of the second conference session as I need to listen back to it so as not to simply reiterate the talking points and audio grabs. But this session was lively and benefited from the mix of expertise from Andrew Hopkins, Jason Fox, Peter Baines, Siobhan Flores-Walsh and Jen Jackson.

Kevin Jones

Andrew Hopkins supports the abandonment of safety culture 13

Culture and safety culture are misunderstood and abused terms, according to Professor Andrew Hopkins speaking at the SIA Safety Convention in Sydney today. His perspective as a social scientist reinforces many of the speakers on disruption at yesterday’s sessions.

hopkins-sia-conf-2016If culture is the characteristic of individuals, culture is transferable or portable outside the workplace but if culture is group-based workers move from social group to social group taken on the cultural characteristic of that group.

Hopkins briefly discussed national cultures where companies seem to struggle to impose their corporate culture on a foreign country but Hopkins says the corporate culture can replace a national culture if the company allows it to. My question would be whether the company should impose a culture or whether their aims could be equally achieved by blending the cultures. Should corporate cultures be allowed to colonies?

Cultural change often has wildly varied time estimates. Hopkins says as soon as a company or the executives decide to change culture the culture starts to change. People often talk about end points yet cultural change has no clear end point as it is a process of continuous improvement and change.

Hopkins concluded his presentation by quoting an SIA publication and concluded that

“The concept of safety culture is so disruptive that we should abandon it”

Kevin Jones

Safety Convention becomes conventional 6

Dr Maureen Hassall (pictured below on the left)says that mining has done great work in improving safety but the fatality rate has not dropped even though there has been some fluctuation. And the catastrophes have had similar causes. So why are mine workers continuing to die?

hassell-sia-conf-2016Perhaps another question should be asked on whether the penalties for recurrent fatalities need to be escalated across the industry? Perhaps it could be possible to apply penalties across an industry sector, such as mining.

The Safety Institute’s Safety Convention is becoming more conventional where the radical discussions of the first session today are being diluted. A significant question asked was all of this information is available but so what? What do we do to use this disruption? Those questions are what persist in delegates as they move to diverse streams and back to traditional safety discussions.

Dr Hassall spoke about the importance of defining control mechanisms and the need to assess and investigate and that mine safety has focused on devices, plant and equipment. Her presentation was curious because some of the most exciting OHS issues in mining have involved safety management – Digging Deeper – or the mental health of fly-in fly-out workers. There was no discussion of these risks even though they contributed to work-related fatalities. (Maybe I was in the wrong session or frame of mind)

There is also confusion in the delegates over the role of the Hierarchy of Controls and Critical Control Management.  It seemed odd that a new approach, Critical Controls, was being proposed so many decades into OHS legislation when Controls were supposed to have already been well understood. Maybe disruption can come late to the party but still be effective.

Dr Hassall’s presentation supports the use of and collation of data digitally and in real time but the challenges that are present in mining, as identified by Dr Hassall needs discussion to clarify, which is one of the advantages of being at a safety conference.

Dr Gerry Ayers‘ (pictured above on-screen) presentation was all about death. He went through a list of construction industry deaths and importantly provided a personality to each of the deaths – who was left behind, who was affected by the death. Every safety conference needs this type of presentation to provide the real behind the theory.

Ayers’ presentation fits the theme of this conference because, as he says, there is nothing more disruptive than a workplace fatality. Some may see his presentation as focussing on the past with little pathway to the future and it would have been better to have Ayers in the audience so that he could contribute to the previous disruptive discussions, but his presentation was rightly described as sobering.

Trish Kerin (picture above, middle)of the Institution of Chemical Engineers Safety Centre spoke about the catastrophes in the process industries. To some extent, Kerin’s presentation illustrates the criticism of Dr David Borys about the gap between research dominated by inquiries into disasters and the safety management of the majority of businesses that exist in the small business sector. Disasters are politically significant so that is part of the reason.

The IChemE Safety Centre seems to be trying to redress the inhumanity that seems to have existed in process safety for decades. For a long time, process industry disasters have mostly been academic puzzles of what went wrong. Even when why what went wrong is considered, the attention was rarely on the leadership and executive (mis)management. This changed with Longford and Professor Andrew Hopkins’ report on the resultant Royal Commission. In the US, this changed with Texas City and Deepwater Horizon. It needs to continue more and before the next disaster.

This session has been very conventional compared to other sessions but the first session of the day did set an almost unreachable benchmark. It was one of those sessions whose importance is not realised until seen in the context of the whole conference.

Kevin Jones

Safety disruption gets context 1

The second session of the SIA National Convention is flatter than the the first, not because it is not interesting but because it is providing us with the social context for occupational health and safety (OHS) rather than challenging the OHS profession.

Bernard Salt is a very high profile demographer whose job is almost entirely about providing social context to whatever we do. He mentioned OHS specifically only four times and then primarily to do with driving trucks but the age data Salt presented shows the need for improvement in the health and wellbeing of the workforce so that quality of life can extend in line with the extended period of our lives.

gahan-sia-conf-2016Peter Gahan (pictured right, speaking)of the Centre of Workplace Leadership is a regular speaker at the Safety Institute of Australia’s conferences. His outline reflects the theme of this conference by disrupting our sense of security and career.

The challenge comes from how we respond to this unease. If we curl up on the couch to binge watch a show, the career is over. We need to look for the opportunities that the disruption offers but this may require us to reassess, if not throw out, the foundations of our profession or the dreams on which we chose our career.

Richard Coleman is well known in the Australian OHS profession through his prominent safety career. His attraction as a conference speaker was on display because he was able to adjust his presentation to accommodate the examples and context that previous speakers addressed. Coleman focused on the digital disruption, particularly as it affects blue collar occupations. He believes that some of these jobs will go within the next five years.

Coleman’s focus on digital disruption provided a great summary of the OHS application of augmented reality and wearable technology. The latter has the best opportunity for safety improvement, particularly in the area of manual handling. Sensor technology can provide better levels of information and in real time that allows immediate interventions at times of great risk.

What these speakers and the panel are all about is to think creatively and think big. Fantasise about your job and the tasks you do now and whether they will exist in ten years and how you can change them now to prepare for the future. If your job leads to a dead-end, change the job. It seems easier to do this now, than ever before

Kevin Jones