Category: due diligence

Due diligence: understanding performance or measuring activity?

~ My safety thoughts ~ 3 Comments

This morning I was doing some work with contractors talking about the concept of health and safety assurance, both in the context of reasonably practicable and due diligence.

One of my areas of interest and concern when working with organisations to understand if their health and safety risks are being managed, is that a great deal that is done in the name of safety and health is characterised and measured in terms of “activity”. In my experience, very little regard is had to the “purpose” of the activity, whether that activity achieves the relevant purpose and whether the purpose is beneficial for safety and health outcomes.

I have looked at these issues previously in my articles, A short primer on due diligence and Lead indicators: Reinforcing the illusion of safety.

As an example, the group discussed the idea of management “walk arounds” or safety conversations. Amongst the group we were able to identify a number of potential “purposes” for this activity, including to confirm whether risks were being controlled, to demonstrate management commitment to safety and to understand any concerns from the workforce.

Most of the organisations involved in the discussion had the “number” of safety conversations managers held as a key performance indicator.

In every case however, the only measure applied to this management task was the number done, that is a measure of “activity”. There was no measure, or even consideration given to, whether this management activity was effective in achieving the purpose. Moreover, none of the organisations had even turned their mind to the possible negative ramifications of this management activity.

In my experience, whatever the intention of the manager while conducting a walk around or safety conversation, if they are perceived by the workforce as being an unnecessary intrusion on their working day or worse, a manager simply trying to tick their KPI’s for the month, they can have profound, negative effects on health and safety and completely disengaged the workforce from the safety message that managers are trying to deliver.

100% compliance with the scheduled numbers of management safety conversations might look good on a traffic light scorecard and might give a sense of comfort, but there is a significant risk that the activity is actually undermining safety performance and contributing to the illusion of safety.

I am not saying all management activities are negative, I am just saying that most organisations do not know what the impact is. Rather, we make assumptions based on the numbers – if we do a lot, the outcome must be good.

Is it?

Having finished the morning discussions, I was reading the news from ABC online, when I came across the following article:

Eddie McGuire’s comments ‘incredibly disappointing’, Cabinet ministers say

The article deals with the recent controversy over comments by various AFL football commentators in the context of violence against women.

Christian Porter, the Social Services Minister linked the comments to the Government’s new $30 million domestic violence campaign, and the report goes on to state:

According to Mr Porter, the Stop it at the Start campaign has already had 25 million individual views, making it the most successful domestic violence campaign launched by any Government. [My emphasis added]

I could accept this comment if the “purpose” of the campaign was to get as many individual views as possible. However, I would have thought a more appropriate measure of success for a domestic violence campaign – one that is presumably linked to its “purpose” – would be a reduction in the instance of domestic violence.

A similar dilemma occurred a number of years ago in relation to Victorian railway safety and the “dumb ways to die” campaign. This campaign was also hailed as a success based on its very high level of traction in social media, although I understand the number of fatalities on Victorian railways actually increased (see for example Dr Rob Long’s comments in Dumb Ways to Die and a Strange Sense of Success).

It seems that style over substance, or activity over purpose is not limited to health and safety management, but it does represent a threat to the management of whatever problem it is applied to.

Health and safety initiatives are, or at least should be, designed to achieve outcomes in the workplace. They are not initiatives for their own sake, nor are they perpetuated as wellsprings of activity.

Every health and safety initiative should have a clearly articulated understanding of its purpose, and a set of criteria by which that purpose will be achieved. We also need to bear in mind the ongoing safety paradox; while safety initiatives have within them the potential to improve health and safety, equally they have the potential to undermine health and safety and make our workplaces less safe.

What do you know about your safety initiatives?

 

Risky Conversations, The Law, Social Psychology and Risk

~ My safety thoughts ~ 4 Comments

New book by Dr Rob Long, Greg Smith and Craig Ashhurst

It is with pleasure I can announce the publication of my new book, Risky Conversations, The Law, Social Psychology and Risk which has been produced in conjunction with Dr Robert Long and Craig Ashurst.

The book is also the 5th in Dr Long’s series on the Social Psychology of Risk.

Risky Conversations

The book is the result of three days of conversations between myself, Dr Long and Craig in February 2016 when we gathered together with Rick Long of InVision Pictures and recorded conversations on twenty three topics in risk and safety. The recorded conversations were transcribed by Max and Sylvia Geyer and then we wrote commentary into the margins of the book (see an example below).

The book is 160 pages and included in the $49.95 price is access to all the videos. In addition a talking book of all the conversations can be purchased for $10.

The book can be purchased here: http://cart.humandymensions.com/?product_cat=books&paged=1

A sample of the Introduction and Chapter 1 can be downloaded here: Risky Conversations Chapter 1

You can see a sample of one of the videos here: https://vimeo.com/162034157

Perth Book Launch: A full launch will be held in Perth on 11 August where all three authors will be present in conjunction with a training day on the Social Psychology of Risk. Details to be announced soon in conjunction with a training day in the Social Psychology of Risk in Perth (to be held in conjunction with IFAP).

Melbourne Book Launch: Kevin Jones (safetyatworkblog) will be launching the book in Melbourne on 27 July (lunch time on day two of the SEEK program). Places for the launch are strictly limited to 30 and can be secured by email toadmin@humandymensions.com Download the SEEK flyer here: http://cart.humandymensions.com/wp-content/uploads/2016/05/SEEK-Program-Human-Dymensions.pdf). All people participating in the SEEK program receive a complimentary copy of the new book.

$450,000: Is this what we want from prosecutions?

~ My safety thoughts ~ 8 Comments

I have written on the topic of safety prosecutions before (Do we need to rethink safety prosecutions?, Rethinking safety prosecutions part 2 and Is this really what due diligence was designed for?), and a recent article posted online by the Safety Institute of Australia Ltd (VIC: Company fined $450,000 after teenager dies in forklift rollover) has prompted me to write on the topic again, and ask the safety industry to really question what it expects from health and safety prosecutions, and whether the current system delivers against those expectations.

In brief, the prosecution arose out of a fatality on a  farm in Victoria.

The owner of a labour hire company, who was engaged to provide workers to pick snow peas on the farm, bought his 15-year-old son and two friends, aged 16 and 17 to help with the work. The owner left the property and soon after the boys began driving a forklift, which had been left unattended and with keys in the ignition, in an unsafe manner. The driving was described as driving fast around corners, skidding and drifting and not wearing seat belt.

Several hours later the owner’s son was killed driving the forklift when it tipped over.

The boys, who had been left  unsupervised, had not been provided with any safety induction or instructions at all, none of them were licensed to drive a forklift and two of them had no prior experience working on a farm.

The farming company was prosecuted for failing to ensure a safe workplace and pleaded guilty. They were fined $450,000

At this point, it is appropriate that I add a little bit of information about myself. I am a lawyer, so I have a vested interest in the prosecution process. I am a farmer’s son and have engaged in exactly the type of activity that led to the fatality – and worse. I have a son, and continually walk a fine line between introducing him to more and more responsibility and keeping him safe. I work in the safety industry and have spent the last 25 years of my working career trying to help organisations improve safety in their workplaces.

I should also say at this point that on the face of the summary of the case, there was an abject failure by a number of parties to properly consider and implement processes to manage health and safety risks in the workplace. A failure which, in my view, required a response.

My question is whether the “prosecution” response does anything for safety.

The legal profession talks about the penalties in legal proceedings in terms of general and specific deterrence. The idea that a penalty is designed to stop the individual or organisation from offending again, as well as sending a message to the broader community about refraining from unlawful conduct.

Even from a narrow, legalistic perspective, it is difficult to see how this type of prosecution is helpful.

While I am sure that a $450,000 fine had a reasonable punitive effect, I am not sure how much of a specific deterrent it was, over and above the death of a 15 year old boy. And I am certain that there are more productive ways to invest $450,000 in safety than injecting it into the Victorian Government coffers.

A $450,000 education campaign? Creating some dedicated “farm safety” inspectors?

Let’s get creative.

If all we want from safety prosecutions is to punish people and organisations who do not meet their legal obligations, then the current approach and increasing fines is probably appropriate.

But every safety conference I attend has regulators and consultants spruiking that we must learn from incidents and the only way to move safety forward is with a “no blame” culture, both of which are completely undermined by a system focused on prosecutions.

The fatality occurred in November 2014. The findings from the Court, the Wangaratta County Court did not emerge until April 2016. There is no written judgement, only press article summaries and media releases from the regulator.

the case is about proving the particulars of the charge. It is not about improving safety or making recommendations to address safety shortfalls.

And what did we learn? That teenage boys should not be left to drive forklifts unsupervised because they might do something silly? That people need to be told about hazards in the workplace? That access to equipment and machinery should be controlled?

Really?

What did we need to learn?

We need to understand why organisations like the farming company and the labour hire company had no systems in place to manage obvious risks.

How is it, that despite all of the regulators and all of the regulation, most organisations do not have anything remotely resembling a reasonable safety management process?

What if, rather than prosecutions, organisations who have had accidents could opt in to a safety learning program. In this case, for example, a detailed investigation and research project to understand all of the factors influencing the incident. Not just the role of the employers and workers, but also the regulator, the way safety information is made available and the best ways to help small and medium sized businesses implement a safety program.

  • The project would be paid for by the employer – so there is still a financial penalty.
  • Both the incident and the research could be highly publicised to add to the deterrent value.
  • Valuable lessons would be available within months, as opposed to meaningless factual statements after years.

Prosecutions can, and should still be reserved for the worst classes of offence but these would be very limited.

This is different from the current enforceable undertakings approach, because it is not designed to respond to the incident per se, but to understand the incident and create wider learnings.

And just a word on regulators – every major accident inquiry in recent times (think, Pike River, Montara, Macondo) has found serious failings in the performance of the regulator in the discharge of their duties.

What, if anything have we learned about the regulation and enforcement of safety in this case?

So, returning to my initial question: What do we it expect from health and safety prosecutions, and does the current system delivers against those expectations?

Due diligence master class

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On 6 April 2016 I will be facilitating a due diligence masterclass in conjunction with IFAP from 8.00am until 3.00pm at the Esplanade Hotel in Fremantle, Western Australia.

The program is suitable for all industries and size of business.

Drawing on legal precedents and major accident investigations from all around the world, I will consider due diligence in the context of health and safety legislation including harmonised, WHS legislation and “accessorial liability” provisions  in Western Australia, Victoria and the offshore oil and gas industry.

The program will focus on the practical and legal expectations on mangers to control health and safety risks in their business, and what day-to-day application of those principles might look like.

Places are limited and the program is already 50% subscribed.

You can access information about the program here, book here, or contact me – gws@nexuslawyers.com.au if you would like to know more.

Is this really what due diligence was designed for?

~ My safety thoughts ~ 3 Comments

On 24 February 2016 findings were handed down in the prosecution of another company officer under the due diligence provisions of the WHS legislation.

In WorkCover Authority of NSW (Inspector Moore) E&T Bricklaying Pty Ltd [2015] NSWDC 369, Mr Kose, a company officer and on site representative of E&T Bricklaying was prosecuted for failing to exercise due diligence in breach of the New South Wales WHS Act.

It is not clear in what “capacity” Mr Kose was a company officer, whether he was a director, CEO or performed some other role. It also seems implicit in the judgement that Mr Kose was involved in the day-to-day work. At paragraph 10, the judgement states:

There were five personnel involved in the laying of the blocks. They were Mr Kose, Mr Rahimi …..

There is nothing particularly instructive about the case, and it certainly does not add anything to the body of knowledge about who is or is not a “company officer”. However, the case does raise an interesting question about whether these were the sorts of cases that changes under WHS legislation to create positive obligations of due diligence on company offices were designed to address.

It appears clear that in whatever capacity Mr Kose was acting, he was a hands-on company officer involved in the day-to-day operations of the business. A typical, small business working director.

Safety and health legislation around Australia has always had provisions enabling the prosecution, and the reasonably easy prosecution, of people in that position. In his excellent paper Personal Liability of Company Offices for Corporate Occupational Health and Safety Breaches: Section 26 of the Occupational Health and Safety Act 2000 (NSW), Neil Foster points out that the vast majority of prosecutions against directors and managers involved officers who were directly involved in making specific decisions that led to the injury or fatality, and that the majority of companies whose offices were prosecuted were small (page 114).

This pattern seems to be repeating itself given the short history of due diligence prosecutions to date, and that despite all of the hoopla and razzmatazz attached to WHS legislation, in practical terms absolutely nothing has changed.

To the extent that due diligence provisions make it easier to prosecute company offices and increases the penalties against them, those provisions  continue to be used against hands-on, working directors in small businesses. Senior executives and boards of large organisations who are not involved in the day-to-day operations of their businesses have nothing personal to fear from health and safety prosecutions.

I am not sure that was the point of the changes to WHS legislation, and it is certainly not what was sold – and continues to be sold – by the safety industry.