Tag: politics

Worker’s Compensation Funds and global financial problems

(Particularly) since the fall of Lehman Brothers, the returns on investments throughout the world have dived.  Australia has been relatively unaffected but the signs are starting to look bad and if it wasn’t for China and India buying the country’s resources, Australia’s economy would more closely resemble Europe and the United States.

 

Martin Hamilton-Smith talking with listeners on 5AA radio
Martin Hamilton-Smith talking with listeners on 5AA radio

This turmoil provides a free-kick for opposition political parties who can question governments on their economic performance and foresight.  For some time the South Australian opposition leader, Martin Hamilton-Smith, has been attacking in just this manner.  Last week the WorkCover Corporation released its annual report.  It happened to be during a sitting of Parliament so question time was peppered with WorkCover-related questions.

 

Often, the discussion is empty argy-bargy but Liberal Party leader Hamilton-Smith asked the most important question based on the 2008 Annual Report.

Can the Minister for Industrial Affairs explain to the house why WorkCover Corporation’s income from investments appears to have fallen by a quarter of a billion dollars in one financial year?

One has to remember that that Annual Report covers 2007-2008 and the financial crisis has only really cranked up in 2008.  WorkCover Corporation lost $238 million.  WorkCover Minister Paul Caica responded by blaming global problems so Hamilton-Smith asked another question, how much has been lost in the current financial year?

Paul Caica, understandably, did not have those figures available but the question highlighted the importance of chronology in the management of workers compensation funds.  When the international investment market started to fail, how did the fund managers of WorkCover Corporation react?

This will become increasingly important as other State Governments in Australia begin releasing their departmental annual reports over the next few months.  The Victorian Government has a habit of releasing their annual reports in such a way that adequate scrutiny is impossible.  The honour and trustworthiness of governments will be shown by how open and accountability they can be in the next 12 months.

But don’t allow them the easy “out” of blaming the global financial crisis for underperformance.  In the area of workers compensation, it is our premiums that provide them their economic base.

WorkHealth – end is nigh after less than one year

Early in 2008, the Victorian Government sprung a surprise on the OHS and health promotion industries by announcing a world-first initiative – WorkHealth.  This program was to be funded by interest generated from the WorkCover scheme to the tune of hundreds of millions of dollars over the next five years.

WorkHealth loses stakeholder support

Two weeks ago, a well-respected OHS professional advised that key stakeholders in WorkHealth were very cool on the program.  This confirmed previous questions raised in SafetyAtWorkBlog about the promotion, transparency and organisational support for WorkHealth.  The professional stated that others were questioning the placement of WorkHealth in the OHS field rather than in health promotion.

Rumour has existed for some months that WorkHealth is a scheme that has been pushed by a narrow range of OHS and workers compensation advocates.

What made WorkHealth so interesting was that the concept originated from within the workers compensation field with workers compensation money.  At the time, the wisdom of committing such a large amount of money to the initiative was questioned by many in the trade union and business areas.  Why head in this direction when there were established mechanisms to reduce OHS and workers compensation costs?

The global economic problems, it is suspected, would have flowed to the investments of the WorkCover scheme and it would be interesting to know what the revenue allocation to WorkHealth now is calculated at.

OHS/Industrial Relations conflict

In The Age newspaper on 26 October 2008, WorkHealth gained some attention as business groups have now seen the criteria for the health assessments of workers.  David Gregory of the Victorian Employers’ Chamber of Commerce and Industry described the criteria as a potential “industrial weapon”.  According to the article,

“WorkSafe told The Age the idea of an initial ‘tick test’ screening process had been abandoned, and the proposed $130 million worth of prevention programs are not in the pilot at all.”

As is evident from the quote, it is the pilot scheme that is being rolled out, however it is clear from the comments of David Gregory and the state secretary of the Australian Manufacturing Workers’ Union, Steve Dargavel that industrial relations sensitivities have not been considered.

Gregory makes excellent points that good OHS professionals are already aware of – workplace safety can only succeed when industrial relations implications and conditions are considered before any intervention process.

OHS has broadened to include the hazards of fatigue, stress, anxiety, depression, workloads, bullying and other matters that have encroached on health promotion and human resources over the last decade or so.  A worker health program would have been more likely to be accepted through this osmosis rather than a surprise announcement.

Is this the end?

WorkHealth could work if it had been generated as a workplace application of public health programs.  The challenge would have been to legitimise the expenditure in an already cluttered health promotion sector.  How would WorkHealth have achieved this testing regime when business is already assessing its workers for psychological disorders, cholesterol, prostate health, hearing, asthma, and a whole range of modern health issues?  It is unlikely that it could so.

It came down to health assessments in a different context – a context where there had been insufficient groundwork to establish the value of the program to its fundamental stakeholders, the unions and employer groups.  To a much lesser extent, the program was not sufficiently integrated into the WorkSafe authority’s program before the announcement.

Also, the timing has been proven to be wrong.  The global economic problems are beginning to squeeze business’ bottom line.  The calls for workers’ compensation premium relief will increase in the same way that businesses have begun questioning the viability of an emissions trading scheme.  WorkHealth is likely to be one of those program cut, so the government will claim, due to the changing economic climate.  The lessons to be learnt are more wide-ranging than just economics.

Federal IR Minister speaks on OHS laws

Julia Gillard, Deputy Prime Minister and Minister for Workplace Relations, received a dorothy-dix question on 16 October 2008 (pages 52-53) concerning OHS harmonisation and the creation of SafeWork Australia.  Sadly, the good points the Minister made were overshadowed by political point-scoring at the Opposition Leader, Malcolm Turnbull.  It is still early days for the Labor Government in Parliament and Minister Gillard is one of the top parliamentary performers.  It is disappointing she did not use her full six minutes to give the issue the prominence it deserved or needed.

The nuggets of information she provided, prior to party politics interfering, were

  • harmonisation will help “39,000 businesses that operate across state boundaries”;
  • “300 Australians are killed at work each year”;
  • “over 140,000 Australians are injured at work each year”;
  • these deaths and injuries are “costing the economy $34 billion”  (presumably) each year.

The report of the inquiry into model OHS laws is due to release its interim report in October 2008 with the final report being presented to government in late-January or early-February 2009.

Australian Greens Senator speaks on OHS legislation

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

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.

Corporate accountability – Lessons from Lehmans

Yesterday,the CEO of Lehman Brothers, Richard Fuld Jr, faced an inquisition at the House Oversight and Government Reform Committee.  It was uncomfortable to watch but fascinating.

Video of the hearings shows the questions focused on Fuld’s accumulation of wealth in the good times and the retention of wealth in the bad times. There are parallels with the non-financial accountability of corporate leaders on matters such as workplace safety and corporate social responsibility.

The chair of the committee, Henry Waxman, spoke of company documents that 

“portray a company in which there was no accountability for failure”.

Waxman said he was troubled by the attitude of Fuld where Fuld would not acknowledge any wrongdoing. Fuld did accept responsibility for the failure of the company but would not accept that his behaviour or the behaviour of the company he lead, contributed to the failure.  In other words, Fuld would not accept that his company had a culture that may have contributed to the bankruptcy.

There will be more of this type of inquiry and in many countries other than the United States.  OHS managers should not sit back and watch the chief financial officer squirm with discomfit and anxiety for the way that the financiers handle this crisis, as there are important lessons about their own accountability, responsibility and disaster planning.

Workplace depression approaches are too narrow

Further to other SafetyAtWorkBlog posts concerning Ms Paula Wriedt’s sacking, Ms Wriedt has issued a statement expressing her disappointment at Premier David Bartlett’s decision.

One comment from a newspaper columnist struck me as odd but worthy of note.  The columnist said that Paula Wriedt’s public statements have followed the line pushed by beyondblue, a depression support and lobby group.  I have had no dealings with beyondblue but note that newspaper articles often end with “For further information on depression contact…..” similarly television news reports.

beyondblue has been a spectacular success in self-promotion and, hopefully, increasing awareness of depression.  In the context of the Premier’s decision on Paula Wriedt, David Bartlett contacted the chair of beyondblue (and former Victorian Premier) Jeff Kennett, prior to his decision.  The Weekend Australian newspaper reported

“I have not taken this decision lightly; in fact, decisions don’t come any tougher than this,” Mr Bartlett said. He received support from former Victorian Liberal premier Jeff Kennett, the chairman of depression support group Beyondblue.

After speaking to Mr Bartlett, Mr Kennett told The Weekend Australian he believed the decision was a very tough call for the Premier, but added: “When you balance up all his responsibilities, the correct one. It might just be what Paula needs to start rebuilding her health.  That is, she doesn’t have other ministerial responsibilities now and she can now focus more directly on her recovery.”

beyondblue does admirable work and has acheived much but it is dominating the discussions on psychosocial issues in the workplace.  It is difficult for other groups to raise matters that are just as relevant to the workplace, if not more so, such as occupational violence, stress, dignity at work, and so on.

We are not yet clear on all the circumstances of Paula Wriedt’s suicide attempt, and we may never know.  We do not know if work stresses or private stresses caused her self-harm but that is not necessarily the point.  Occupational health and safety long ago left the confines of the workplace and controlling workplace hazards, particularly psychosocial issues, needs a bigger canvas.  There must be an approach that assists the individual in work and non-work contexts. 

Some countries and States are trying this through work/life balance initiatives but the approaches are usually skewed to focus on interventions on the individual rather than looking at the social structures.  In OHS we look at the “system of work” to determine the most effective interventions.  To affect true and lasting change, we must apply the “system of living”.  We must be careful not to over-emphasise the individual and be distracted from the cultural initiatives.

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