Tag: CEO

Asbestos Awareness Week calls for action

During Asbestos Awareness Week 2009 in Melbourne Australia the trade union movement pledged to begin a national strategy to control and remove asbestos from Australia.  This would have been a very tall ask any time in the last two decades but Asbestos needs to compete now with Climate Change for the attention of the media, the decision makers and the heartstrings of the community.

It is accepted that in the near future more people will be touched directly and indirectly by asbestos-related diseases but, at the moment, the issue is concentrated in low-income industrial suburbs and, as such, is still dismissed by some (often in suburbs with large trees and no pubs) as a disease that only strikes the blue-collar smokers.  The social inequity of asbestos-related diseases should be studied in some depth as it is likely to shame governments into action on this hazard.

Jim Ward - Australian Workers Union

At a seminar in late November 2009, a small audience in the Victorian Trades Hall was told of the success of the Tasmanian campaign in gaining government support for the removal of all asbestos by 2030.  Jim Ward of the Australian Workers Union spoke of the approaches to Goliath Cement (“The James Hardie of Tasmania”). Ward told how the CEO of Goliath did not blink at the request to remove asbestos.  Ward said this type of response has been repeated throughout Tasmania.

The audience also heard from several who are at the frontlines of dealing with asbestos-related diseases.  Vicki Hamilton and Tim Tolhurst spoke of the frustration of having inadequate disposal facilities in regional areas of Victoria.  The challenge here is immense as the temptation to bury asbestos in the back paddock when no one’s around is strong even though it is selfish and immoral.  Vicki and Tim showed how a structured program across the community is required because one cannot encourage the removal of asbestos until there is a place to safely dispose of it.

Vicki Hamilton of GARDS

Pat Preston, ex-CFMEU and now with the Asbestos Contractors’ Group, spoke of the legislative and operational problems faced by licensed asbestos removal contractors.  The holes and conflicts all complicate the process of asbestos removal and disposal and increase the cost, particularly of asbestos removal.

Several speakers pointed to the anomaly that the removal of asbestos from domestic buildings of less than ten square does not required licensed removal, thereby “encouraging” small volumes of asbestos to be hidden at the bottom of domestic rubbish bins.  The OHS risks to waste collectors are not dissimilar to those who dispose of toxic and trade waste down the toilet next to the workshop when WorkSafe or the union is not around.

Of course the audience and speakers seem to all agree that there is no safe level of asbestos exposure.  There are certain to be those in Australia who are “asbestos-skeptics” and many seem to have the ear of the decision-makers.

One speaker provided a fresh perspective that was very appropriate but surprising for a couple of reasons.  Anthony La Montagne, of the University of Melbourne, has undertaken ongoing research on job stress, cancer clusters and, clearly, asbestos issues.  La Montagne provided the glum news that several promising medical techniques for early detection of asbestos have come to nought.  The only effective risk reduction technique is for those who may have been exposed to asbestos to quit smoking as this smoking appears to exacerbate asbestos-related disease.

Several speakers noted that in the Asbestos Awareness Week 2008, there was a motion to have the Government undertake action on asbestos.  The resulting inaction was embarrassing and motivating with participants committing themselves to continuing to lobby for controls on asbestos.  This is going to be a considerable challenge if they continue through the same lobby process that they have applied for the last few years.

Tom Tolhurst of ADSVIC

The asbestos safety advocates should drop “awareness” from the week’s title because awareness equates to “aspirational targets”, former Prime Minister John Howard’s way of promising much and delivering nothing.  Just as everyone accepts that smoking causes lung cancer and climate change exists, people know that asbestos can kill.  Move away from awareness-raising to action.

Research the social inequity of asbestos in low-income areas.  Many domestic houses have asbestos houses or in their roofs, particularly in low-income areas which are also the areas where asbestos workers live.  If the reality and scope of this situation was proven to a level and in a format that policy-makers accept, the asbestos control option would be much stronger.  Even if the government continued its inaction, a case could be put to the discrimination tribunals and human rights sector to shame the government to represent all citizens equally.

Market the asbestos week.  White, pink and striped ribbons are becoming a fundraising cliché but the marketing of social health issues works.  There must be a coordinated approach to getting sponsors and support into the promotion of asbestos-related diseases on a large scale.  Once there is serious money behind the issue, one can fund research and present data that convinces decision-makers of the reality of the issue.

Pat Preston of Asbestos Contractors' Group

Undertake a public health cost-benefit analysis of asbestos-related disease, as one speaker advocated at the Victorian Trade Hall.  There are many lessons from the compensation issues of James Hardie Industries but one is that compensation creates wealthy (for a short while) families of dead workers and can do little of health benefit to the mesothelioma sufferers.  It is surprising that the fact has not clicked in the government mind that compensation for asbestos-related diseases provides an important but only symptomatic relief.  The government is applying paracetamol to an issue that requires surgery.

The union seminar was heartening in that it showed how many people are actually tackling the issue of asbestos-related diseases.  But it also operated under a cloud of frustration with an occupational and public health risk that is not receiving the government support that other similar matters are.  Trade unions are a vital part of any plan to control asbestos but just as many people in the leafy suburbs are isolated from asbestos risks, so the audience for the asbestos message is limited by the message remaining within the trade union context.

Tony La Montagne of the University of Melbourne

There needs to be a creative approach to generating sufficient community outrage over the unnecessary deaths of workers from asbestos so that the government cannot avoid action.  The James Hardie legal action and the lobbying of Bernie Banton, and others, was about compensation, about making a company accept its social responsibility, about making it pay.  It worked, but James Hardie still cannot afford the compensation bill that is the reality of decades of profits from a toxic substance that kills.

In 2009 several Australian Governments have helped out this company by contributing $A320 million to the company’s compensation fund.  Why?  When did the government decide to cover the costs of a company’s exploitation of workers?  This is on top of having to fund the public hospitals that have to deal with mesothelioma victims.  The government, and the taxpayer, is paying twice!

Let the company fail and allow the class action lawyers to pick over the assets.  Or better yet, keep James Hardie Industries alive and bleed it just enough so that it can fund the removal of its toxic legacy for the next thirty years.

Every shareholder in James Hardie that receives their dividend cheques from whichever country James Hardie moves to next (Zimbabwe cannot be far off) needs to understand that those dividends could be used to ease the pain of the workers who generated the corporate profits rather than contribute to their own bloated share portfolios.

Kevin Jones

Understanding the new world of the CEO

OHS professionals are very keen on advocating a change in workplace culture as a base requirement for safety improvements.  They also regularly quote the need for “top-down” leadership (however that is defined) to generate the  cultural change.

SafetyAtWorkBlog has already may some comments about leadership today but an interesting article has been brought to our attention that, although it doesn’t discuss safety, talks about how the role of chief executive officers over the last decade and some of the agents of change.

The  Society for Industrial and Organizational Psychology released an article on 23 November 2009 concerning the selection of CEOs and succession planning.  The article says that the days of the “imperial CEO” has gone as (US) legislation has required a the process of complaisance to be shared.  Perhaps there really is “no I in TEAM”.

Randall Cheloha summarises the variety of forces and obligations that now must be considered when running a corporation.  Occupational Safety is not included but could have been.

“There are more constituencies to satisfy. In addition to major shareholders, financial analysts, employees and former executives, some companies, particularly those that received large government bailouts, have directly or indirectly been asked to change directors and add new players to their boards to represent the new constituencies, including the federal government and unions.”

Not only have the constituencies multiplied but the demands have changed as well.  Many of the groups suddenly have the ear of the executives and realize from past experience that the window of opportunity may not last.  The risk is that they go in too hard and too fast and create their own resistance.

Australian corporations had a habit of always looking overseas for CEOs, implying that the local executive pool was deficient.  That has changed recently where well-qualified local candidates are getting serious consideration and, some, appointments.  The SIOP article refers to the weakening of corporate culture by feeling the need to look outside for candidates.  Cultural continuity is equally valid and safety is part of that.

Hopefully the days of CEOs taking pride in nicknames such as “toecutter” or “the axe” have gone the way of “razor gangs”.

There is the risk of “cronyism” with internal CEO appointments but that risk is minimised if the cultural work on the company has already been undertaken.

Australian conferences have recently been pushing for “CEO days” where CEOs talk about the importance of safety and culture in their organisations.  To some extent, the safety professionals in the audience are the wrong audience.  Perhaps it is the CEO conferences that need to hear from a safety spokesperson who can use bad OHS management as a case study of how executive decisions created a toxic culture that led to injury and death.  Sadly, such case studies are not hard to find.

Kevin Jones

This may not work for OHS but why not?

On 9 November 2009 public submissions close on Australia’s model OHS Act but the move for harmonisation and, hopefully, a simplification for business and government continues in other areas.

The Australian Transport Council (ATC) met on 6 November 2009 and agreed on many Council of Australian Governments (COAG) matters concerning unnecessary bureaucratic duplication:

“ATC agreed to recommend to COAG that South Australia would be the host jurisdiction for the national rail safety regulator.

ATC also agreed to recommend to COAG that a host jurisdiction for the national heavy vehicle regulator be agreed, noting that New South Wales, Victoria and Queensland have expressed interest.

It was agreed that the Australian Maritime Safety Authority will be the national regulator for maritime safety, responsible for regulating commercial vessels. This is a significant step towards national uniformity.”

There were several other initiatives mentioned – level crossing safety, a National Road Safety Council, minimum standard for taxi drivers.

But the recommendations above decentralise some of the bureaucracy.  At the HR Leaders Awards recently, the CEO of Carnival cruise liners, Anne Cherry, said that many public servants exist in a unique policy environment of the capital city, Canberra, and the policies reflect this.

SafetyAtWorkBlog would like to suggest a change that could occur within the enforcement parameters of the OHS model law review.

Let’s consider a national mine safety regulator with offices located in each of the mineral resources regions of Australia.  Could transport regulators have offices within, or just outside, major port facilities?  Major hazards regulators in major hazards zones?

There is much information bandied around about flexible working arrangements and the use of new technology to unite isolated workplaces.  How radical would it be to split the centralised OHS regulators’ offices into hazard-based offices in rural, regional and suburban locations?  The inspectors would be adjacent to the hazard locations for enforcement and the advisers are on hand for assistance to industry.  The locations could even be seasonal to deal with seasonal industries and labour forces.

OHS enforcement policies would remain the same, only the place of implementation and coordination would change.

Most OHS regulators already have a a couple of regional offices but mostly these remain in the outer suburbs of the capital cities.  Some entire departments have relocated to satellite towns for cost reasons but also to provide employment opportunities outside the major population centres.

Could OHS be regulated and enforced across a country the size of Australia and through the major industrial and resource structures, without the concentrations of policy-makers and inspectors in city offices?

Kevin Jones

OHS must raise its profile in the debate of directors’ liability and accountability

The global financial crisis has highlighted many business management issues.  Probably one of the most contentious is executive remuneration which is based on the question “should executives receive performance bonuses when the company is not performing well, ie. not returning profits to shareholders?”  But underpinning even this question is one of accountability.

Business leaders, commentators, lawyers and politicians are comfortable in discussing financial and corporate accountability but extend that discussion to other areas of business and they respond with a confused stare or outright dismissal of the proposal.

This week, the Australian Financial Review newspaper ran a page one story: “Revealed: directors face harsher liability penalties.”  [None of the AFR articles are freely accessible online] The article revolved around Australian Government plans to “break an impasse between state governments over proposals to harmonise conflicting commonwealth and state directors’ liability laws.”

As should not be surprising from a business paper, the discussion centred on financial and corporate governance issues but OHS obligations were floating behind all of the business-speak.  This was particularly obvious with this paragraph:

“Federal ministers have expressed concerns that onerous directors’ liability rules increase the cost of directors’ insurance and discourage them from taking board seats.”

This paragraph shows that the first response to any corporate trouble is insurance.  This cowardly response is short-sighted and contributes to the unnecessary growth in litigation which the directors regularly complain and which increases the cost of liability insurance premiums.

It is also an acknowledgement that the introduction of new rules does not address the behaviour intended, it leads to investigating ways of avoiding accountability for one’s actions.

The second point of that paragraph is that people are more likely to refuse to participate than to undertake sufficient education that would allow them to perform the job better and with less risk.  The response should not be “it’s too risky so I won’t do it” but “let’s get better informed so that my decisions are more valid and the risk is reduced”.

It is clear that lawyers are running the agenda when semantics enter the argument.  The AFR article goes one to say “there are fears about confusion over the distinction between executive and non-executive directors”.  This confusion comes from the main concern of directors being to cover one’s arse rather than focusing on the job at hand and the corporate purpose.

The AFR article makes no mention of OHS but the accompanying article “Duty weighs heavily” by reporters James Eyers and Annabel Hepworth does.  Eyers and Hepworth look back through several decades of law reform investigations and reviews to show the history of similar director concerns.

But it is a more recent statistic that is the nub of the article.  A Treasurysurvey of directors from top Australian listed companies, in conjunction with the Australian Institute of Company Directors, found that

“…71 per cent of those surveyed had declined taking board seats mainly because of their fears of personal liability, while 46 per cent had resigned from a board position because of the issue.”

These concerns largely deal with false market rumours, manipulating securities prices, criminal cartels, consumer protection laws and others.  It is this company that the importance of taking responsibility for OHS should be pushed by the safety advocates but it seems that the business and corporate contexts of OHS are only ever discussed by the corporate lawyers.  And yet, OHS professionals complain about not getting heard at Board level.  Perhaps what is needed is one of these OHS professionals to take a business degree so that OHS can be described in terms business understand.

Of course the risk is that OHS may be found to be contrary to all the basic capitalist concepts and that the only way it can be applied in a business is for the application of legal “wriggle room” from the concept of reasonably practicable.

On 6 November 2009, Bob Baxt (a partners with law firm Freehills and the chair of the law committee with AICD) responded to the Eyers and Hepworth article with a personal opinion describing directors and senior managers already in the “firing line” from the corporate regulators.  He seems to see this as unfair but those executives are in the “firing line” because they are suspected of doing the wrong thing.

Baxt describes the “reverse onus of proof” as an “obnoxious device” and he may be right but he needs to consider why such a provision was introduced in the first place – business managers were not complying with their legislative obligations, they were avoiding responsibility, taking short cuts for personal wealth, having workers die and then winding up the company to avoid prosecution.

Too many business professionals focus on “cause and effect” and see injustice.  Yet if they looked a little further back and analysed the “causes” a bit more carefully they may just see that in many cases the regulatory changes have come about as a result of their own misdeeds.

The analysis of capitalism that resulted from the global financial crisis has faded very quickly as the markets rebound.  Companies are applying the same behaviours that led to that crisis.  Most business analysts and executives talk about leadership as the be-all and end-all but we should not be lead in the same direction as in the past as we are likely to end up in the same place.  True leadership is about accepting mistakes and heading in a fresh direction where such mistakes cannot be repeated.

Those who are bleating about how corporate executives are being bludgeoned by regulation and accountability need to get out of the leafy middle-class suburbs and the office buildings with bayside views and take some time to reflect on how we came to be in such an economic mess and why workers continue to get injured, maimed and killed.  It may just be that accepting responsibility is the new foundation required to build a humaneand profitable future.

Kevin Jones

Good corporate advice tainted by poisonous product

In Matt Peacock’s book, “Killer Company“, an entire chapter is devoted to the legacy of the James Hardie chairman, John B Reid.  In Peacock’s talk at Trades Hall in October 2009, he mentioned that Reid had once published a book called “Commonsense Corporate Governance”.  The apparent hypocrisy of an executive of a company that knowingly sells toxic material while advising others on how to manage their corporation responsibly generated chuckles of disbelief in the Trade Hall audience.

Reid book cover 001SafetyAtWorkBlog obtained a copy of John Reid’s book to see first-hand that someone could do such a thing.  A sad part of all this is that the advice in the book is sensible but Reid’s “legacy” now taints all he does and all he says.

One random example of the advice he provides concerns dealing with consultants:

“Where, as with solicitors and auditors, it is imperative for the company to retain them, company staff need to be reminded that the professional advisers are paid for on the basis of the time that they spend on the company’s business. This is not predetermined by the nature of the task. In large measure it is affected by the decisions made and by the homework done within the company. What does this mean?

First, the imposition of new and more demanding, and frequently less precise, legislation on all manner of subjects has made management and, as a result, directors, nervous about things that directors 50 years ago would have dealt with very quickly-and inexpensively. Further, the increasing number of specialists necessary within a company’s own payroll is a result of this legislative epidemic, and has produced a reinforcement of this culture of caution and, occasionally, of fear.”

Safety professionals may want to take particular note of this corporate imperative.

Peacock points to the strict confidentiality clauses that Hardie included in any settlements in the 1970s.  Peacock writes (p 156)

“Secrecy indeed was Hardie’s byword, one endorsed by the chairman, who would later advise aspiring directors to ‘remain silent where there is criticism’.”

Reid recommended this in a bulleted list of ways to handle the media.

John B Reid, whose personal wealth was estimated at $A181 million in 2004, is not unique in advising companies while also having a tarnished corporate reputation.  Some argue that the adjective “good businessman” is a tautology.

There is no doubt that Reid was an active philanthropist and corporate citizen.  He was awarded an Order of Australia for “service to industry” – no citation is available to explain the decision.  In 2006, he received the Goldman Sachs JBWere Philanthropy Leadership Award.

Greek tragedies were full of hubris and examples of the single flaw that made good men do bad things.  If the plays of Euripides, Aeschylus and Sophocles have yet to be analysed for their advice to corporate executives, they should be, for not only do they show human flaws but human corporate flaws.

John B Reid’s book on corporate governance is an easy read and has valuable lessons but it is now a book that makes the reader feel dirty.

Kevin Jones

Australian AGMs mention workplace deaths

Australia’s corporations are busy releasing their annual reports in October 2009.  The outgoing managing director and CEO of Boral Limited, Rod Pearse, provided his comments on the company’s safety performance to shareholders on 28 October 2009.

“Since demerger [January 2000], Boral’s safety outcomes have delivered steady year-on-year improvements and compare well with both ASX100 and industry benchmarks. Employee lost time injury frequency rate of 1.8 and percent hours lost of 0.06 have both improved by 80% since 2000 and are better than those of our competitors in like industries and in the top quartile of companies in the ASX100.”

Boral is, according to the executive statements, “a resource based manufacturing company with low cost manufacturing operations.” Continue reading “Australian AGMs mention workplace deaths”

OHS – time to grow up or get locked in the attic

In OHS law in Australia, the employer/employee relationship is dead or, at least, coughing up blood.  OHS law is to be based on “people conducting a business or undertaking” (PCBUs have been discussed briefly elsewhere) and not a worker working in a workplace, even though the recently changed industrial law, the Fair Work Act, maintains this relationship.

This morning in a staff seminar at a large multinational business in Australia a regional CEO revealed a considerable level of financial detail to his employees, much more so than any of the staff had seen before.  His reason for this was that he was talking with “adults”.  He employs adults and expects his workers to act like adults.  He also said that he cannot understand why, for so long, employees have been treated as children or act like children.

Past occupational health and safety law seems to reflect this relationship.  Employees have expected someone else to fix a problem because the employer has the principal responsibility for everyone’s safety.  The employee has had a legislative responsibility to look after their own safety and that of others for decades but it was rarely emphasised and only occasionally did it appear as a reason for a prosecution.

To be simplistic for a moment, parents set the house rules for when children are in the  house.  As children grow, the rules are amended and new rules are created as the child becomes more mobile, curious and intelligent.  In many circumstances, the children are given a fair degree of flexibility in meeting the house rules but every so often the rules need to be enforced and children reminded of them.  A penalty of some sort is applied.

At a WorkSafe seminar on 26 October 2009 in relation to the proposed Safe Work Bill, there was a tone to the panelists’ comments that seemed to be calling for a new “maturity” in OHS management.  It was as if the last thirty years has been the learning phase where the house rules have been clearly established and the children have reached a point where the house rules are to be self-policed.  It could also be put that the children are expected to extend these rules to any guests to the house.  But the analogy of a house as a workplace and business should stop there before it becomes silly.

What the new/proposed OHS laws are looking for is a responsible approach to staying safe.  The emphasis on “reasonably practicable” in the legislation is a plea and an expectation for people in a workplace to behave reasonably.  The impression is that if the test in law is to be of a “reasonable person” then the OHS law should be encouraging people in a workplace, whatever their status, to act reasonably.

In short, the Australian Government is asking businesses and workers to “grow up”.  The test will be who chooses to be sitting at the family meal table and who becomes the mad uncle locked in the attic that everyone feels embarrassed by.

Kevin Jones

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