For anyone trying to work their way through due diligence in the context of occupational safety and health, I have put together a short 8 and half minute primer with a few ideas.
I hope you find it useful.
Second due diligence master class
On Wednesday 15 June 6 April 2016 I will be facilitating a second 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.
The first program in April sold out, and places are limited. The program is already 75% 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.
$450,000: Is this what we want from prosecutions?
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?
An adequate system of work – And no SWMS required
In a recent NSW decision, Safe Work NSW v Wollongong Glass P/L [2016] NSWDC 58, the New South Wales District Court has again looked at the issue of an employer’s liability under occupational safety and health legislation where no written system of work exists.
This is a topic that I have discussed in previous posts which you can access here.
The facts as described in the case were:
[2] At about 2.30pm on 6 March 2013 at the defendant’s premises (the factory), the deceased was assisting another employee Mr Pham to lean a number of glass sheets stacked on an A-frame trolley forward to allow Mr Pham to remove one of the sheets stored behind them. The glass sheets were 2306mm high by 2100mm wide and weighed approximately 80kg each. The procedure adopted by the deceased and Mr Pham was for Mr Pham to lean the sheets towards the deceased and for the deceased to support them with his hands. It was intended that when Mr Pham could access the required sheet, that he would attach a pinch grab to it and remove it to another A-frame trolley by the use of an overhead travelling crane (the crane). The weight of the glass sheets became too much for the deceased to support and they fell causing him fatal head injuries.
[3] At the time the deceased was under the influence of cannabis to the extent that in the opinion of Dr Judith Perl, a consultant pharmacologist, the deceased’s perceptions, judgement, decision making processes, vigilance, appreciation of dangers, concentration and reaction times were significantly impaired.
While it It was common ground that the defendant a “system of work” at the date of the incident, it was not “reduced to writing“. It was implemented through verbal direction and on the job training, enforced by supervision.
The prosecution argued that the:
“... system of work was inadequate [and] described the …system of work as “informal”, “ad hoc” and involving the exercise of a worker’s discretion, based on their experience, to determine how to move a piece of glass.” (paragraph [66]).
As often happens in these cases, the prosecution alleged that there were a range of reasonably practicable steps that the employer could have taken, and that these reasonably practicable steps were proven because they were methods adopted by the employer after the accident in a Safe Work Method Statement.
Ultimately, the Court accepted that the employer’s system of work was sufficient, notwithstanding that it was not a written system. The Court found that the system of work provided adequate training, including the use of a buddy system, that was enforced by supervision.
Moreover, the Court expressly found that:
It was not reasonably practicable for the defendant to provide the training required by sub-paragraphs 6(a) and 6(d) in a written SWMS … (paragraph [95]).
The Court observed, firstly that a SWMS was only required for high risk construction work, which did not apply in this case and further, a SWMS is not evidence the workers had been trained in the content of the document nor that they would comply with it.
While I think that there are elements of the case that may be open to challenge if it was appealed, it is consistent with a number of cases that challenge the credibility of documented safety management systems, or at least their application in practice.
The lessons from all of these cases is that the primary duty of an employer is to ensure, as far as it can, that it’s workers understand the risks associated with the work they undertake, and work in accordance with the controls that have been implemented to manage those risks. To the extent that this can be demonstrated:
“Where an employer is found to have laid down a safe and proper practice and there is no evidence that the employer failed to use due diligence to see that the practice is observed, then a casual failure by inferior employees, even if of supervisory rank, to observe that practice on a particular occasion will not render the employer criminally liable for a failure to ensure safety” (paragraph [32]).
Whether those risks and the measures to control them are evidenced by documented systems is neither here nor there. Indeed, one of the common failings of safety management systems is our tendency to document the system but then never apply any effective assurance, much less adequate due diligence, to confirm that the system is implemented and effective in practice.
Ultimately, it will be the evidence of the workers and their description of how they perform the work, both at the time of the incident and historically, that will determine the extent to which an employer has implemented an effective system.
Documented processes for managing health and safety risks at work are of course important. In some cases they are a strict legal requirement. However, if you have documented systems that describe how work ought to be performed you need to be continually asking the question, how do I know the work is actually being performed in accordance with that system?
For what it is worth, the number of incidents or injuries that you have in a workplace is not a measure of whether work is being performed in accordance with your documented systems.
Due diligence master class
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?
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.
Rethinking safety prosecutions part 2
Some time ago I wrote a post about the value of criminal prosecutions for safety breaches as part of effective safety management. The post is available HERE.
A discussion about the nature of “safety prosecutions” was recently held on LinkedIn following an article I posted about the acquittal of engineers involved in the Deepwater Horizon disaster in the Gulf of Mexico (see for example the CSB Report). You can see the LinkedIn discussion HERE.
Given the limited scope to expand a discussion in LinkedIn comments, I promised to write a more fulsome article, which I have attempted to do below.
The starting point for discussion about safety prosecutions is, I think, to understand what prosecutions are designed to achieve.
Inevitably in any discussion about safety prosecutions there is a multiplicity of views about what people perceive the process is designed to achieve. These include, compensation, punishment, deterrence and the opportunity to “learn lessons“.
In Australia at least, it seems unlikely that the current prosecution regime would fulfill any of these perceptions.
First, occupational safety and health prosecutions are not designed to compensate anyone. The workers compensation regime and/or civil proceedings (i.e. claims in negligence) are designed to compensate people for loss caused by workplace accidents and incidents. They are an entirely separate legal process, and compensation does not form part of the consideration of a criminal occupational safety and health prosecution.
Neither are occupational safety and health prosecutions designed as an opportunity to learn lessons. Prosecutions are typically run in relation to a very narrow set of charges and “particulars“. For example, if it is alleged that an employer failed to do everything reasonably practicable in that it failed to enforce its JHA procedure then the prosecutions about whether:
- The alleged failure occurred; and
- It was reasonably practicable for the employer to enforce that procedure.
There are no lessons about what might constitute a good JHA procedure, or a good process for ensuring that the procedure is followed.
As a more practical matter, prosecutions are very limited in their ability to teach us lessons because inevitably any decisions are made several years after the event occurred. In many cases decisions are not even published so that even if there were lessons that could be learned, they are not available to us.
Theoretically, prosecutions are designed to punish wrongdoers and provide both specific and general deterrence, that is, deter the guilty party from offending again and act as a warning to all other parties not to offend in the future.
Again, the evidence is far from clear that occupational safety and health prosecutions achieve this outcome, insofar as there does not appear to be evidence that a robust prosecution regime decreases the number of health and safety incidents.
For example, the ninth edition of the Workplace Relations Ministers’ Council Comparative Performance Monitoring Report issued in February 2008 show that Victoria and Western Australia, who had the lowest rate of prosecutions resulting in conviction at the time, also had the lowest incidence rates of injury and disease and enjoy the greatest reduction in average workers’ compensation premium rates over the three years to June 2006.
Of course, as with all statistical information, there could be any number of reasons for this finding. My point is not whether the finding is right or wrong. My point is we do not have the evidence and we have not had the discussion.
Although, the limited efficacy of criminal proceeding should not come as a surprise. The Robens Report published in the 1970s, an on which modern Australian health and safety legislation is based, identified:
The character of criminal proceedings against employers is inappropriate to the majority of situations which arise and the processes involved make little positive contribution towards the real objective of improving future standards and performance.
One of the ironies inherent in this discussion is that it is often the safety industry that is at the vanguard of the charge calling for significant prosecutions and directors to be sent to jail in the event of workplace accidents. This is the same industry that thrives on selling poor quality incident investigation processes based on a “no blame” culture.
It is interesting that the industry can say on one hand that we can only achieve effective safety outcomes where we don’t seek to blame, but that if something serious happens (i.e. someone dies) then there must be someone to blame and they should be prosecuted with the full force and effect of the law.
To me, this discussion is another example of the opportunity lost during the “harmonisation” of Australia’s health and safety legislation.
Rather than an informed discussion about how health and safety legislation could achieve the best health and safety outcomes, there seemed to be a broad assumption – not argued at best, unproven at worst – that, notwithstanding 20 or more years of history, prosecutions, large fines and personal liability was the best approach to improving health and safety outcomes in Australia.
I have personal views about what might be a better process to deal with those workplace accidents that are serious enough to warrant a “public response”, but this article is not the place to describe them. Rather, I hope that this article might prompt the safety industry to think more carefully about what it wants from its regulations and regulator and not use every workplace tragedy as an opportunity to promote the language of blame as an appropriate response to workplace accidents.
We cannot continue to promote safety using the message of fear and blame and then be surprised by how difficult it is to shift culture in an organisation.
Changes to Western Australia’s Dangerous Goods regieme
From 5 February significant changes to Western Australia’s Dangerous Goods regulation came into effect.
One interesting and important change is that most duty holders will be able to conduct a compliance check against the applicable Codes of Practice instead of conducting a separate risk assessment for storing and handling dangerous goods.
For example, a new provision in relation to Dangerous Goods Sites states:
in making a risk assessment of the dangerous goods stored or handled at a site the operator of the site may make a judgment in relation to the assessment of the risk posed by a hazard and the risk control measures for the hazard by reference to compliance with a code of practice approved under section 20 of the Act [my emphasis added]
Information about the changes can be found here and details about the changes are set out in the Western Australian Government Gazette here.
There are more than 50 amendments that will need to be considered by organisations whose business involves the use and management of dangerous goods.
Dangerous Goods amendments in Western Australia
Amendments to the Western Australian Dangerous Goods Safety (Road and Rail Transport of Non-explosives) Regulations 2007 will take effect from 1 January 2016.
The amendments clarify the duties of parties in the transport chain, such as consignors, loaders and prime contractors and rail operators. For example, a new regulation 114(5) provides:
(5) A prime contractor or rail operator must not transport a load of dangerous goods (other than a placard load) in or on a cargo transport unit if —
(a) the load is placarded; and
(b) the person knows, or ought reasonably to know, that the placarding is false or misleading in a material particular.
Penalty for this subregulation: a fine of $10 000.
You can access a copy of the amending legislation HERE.
The amending regulations also refer specifically to the Australian Code for the Transport of Dangerous Goods by Road and Rail, and include the following definition:
ADG Code means the Australian Code for the Transport of Dangerous Goods by Road and Rail (also called the Australian Dangerous Goods Code) published by the National Transport Commission, Edition 7.4 (ISBN 978-1-921604-69-0), as in effect on 1 January 2016, including (for the avoidance of doubt) its appendices;
Importantly, a new ADG Code was published on 18 December 2015.
You can access the ADG Code and further information about it HERE.
Supplier of plant prosecuted for workplace injury
In a recent prosecution under the the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) Hammelmann Australia Pty Ltd was convicted and fined $20,000 for breaching their duties as a manufacturer of equipment used in a workplace.
The prosecution arose from an accident in March 2011 when a diver was seriously injured whilst using an underwater high pressure spray gun manufactured by Hammelmann. An investigation found that the high pressure spray gun was not supplied with any operating instructions providing specific information or directions on its safe use and maintenance.
The relevant clause of the OPGGS Act requires that manufacturers of plant supplied to offshore facilities must take all reasonably practicable steps to make written information available about the design, construction and safe use of that plant, and similar provisions exist in health and safety legislation in all other Australian jurisdictions.
My Safety Thoughts 