The “head scratcher” in due diligence

Free Access

I’ve been having a “hmmm(?!)” moments with a wee bit of the due diligence stuff in clause 27 of the Work Health Safety Bill (WHS). I’m interested to hear what you people reckon about it.

Here’s the rub: I don’t think it’s possible to get a clear idea of what it means to comply with the due diligence obligation as set out in clause 27(5)(a); in turn, this means the obligation is, for all practical purposes, unenforceable.

Below is a slab of the preliminary words and the provision, with a bit after it for context:

“(5) In this section, due diligence includes taking reasonable step

 (a)  to acquire and keep up-to-date knowledge of work health and safety matters; and

 (b) to gain an understanding of the nature of the operations of the business or undertaking…”. [emphasis added]

In the process of going through the WHS stuff to see what changes I need to look at for a client’s SMS (well in advance of the Victorian move over to the national laws) I decided to look at the due diligence stuff first.

A quick read of sub-clause (5) shows there is a whole bunch of stuff on the sort of things you’d expect a “mindful” organisation to be doing to keep senior managers up-to-speed.  There isn’t an issue with paragraphs (b) through to (e); they deal with good mindfulness stuff for their business and undertaking. It’s para (a) that has quizzical compliance issues.

It’s pretty obvious that a safety management system ain’t gunna work properly if senior managers don’t have “an understanding of the nature of the operations”, don’t have the resources and processes to manage safety, etc.  Continue reading “The “head scratcher” in due diligence”