Regulating Safety: Context, Corporate Governance and Culture

1. Regulating Safety: Context, Corporate Governance and Culture Panel Session: Governance & Meta-Regulation 6-8 December 2004

2. NRCOHSR • Conducts& facilitates empirical & policy-focused research into OHS regulation • Monitors, analyses & documents Australian & international developments in OHS regulation & research • Produces a web-based series of working papers reporting on OHS regulation & research

3. Overview of Session • Three presentations: • Beyond regulation – a contextual approach to driving & enabling safe design • OHS, regulation & the mining industry • Mandating a safety culture?

4. Beyond regulation – a contextual approach to driving & enabling safe design Presentation to Conference Governance & Meta-Regulation, 6-8 December 2004 Liz Bluff - National Research Centre for OHS Regulation

5. Outline • Rationale & legislative basis for research • Research design & methodology – in brief • What are the levers for manufacturers of workplace plant & who pulls them? • Rethinking & reshaping OHS regulatory levers

6. Rationale & legislative basisfor research • ‘Safe design’ - eliminating or minimising risks early in life cycle - a key OHS strategy & national priority • Plant a leading cause of work fatalities & injuries • Statutory duties to design & construct plant to be safe, test & examine, provide info (10-20 yrs) • Risk management process regs & codes (5-10 yrs) • Some technical standards (mandatory or evidentiary)

7. Research design & methodology • Qualitative research - three interlinked studies: • Review & analysis of legal structure – Australian & overseas (EU), OHS & product safety • OHS regulator’s perspective – interviews & documentation - re enforcement policy, practice & perceptions of response to regulation • Manufacturer’s perspective – interviews, observation, documentation - re practices, processes, structures, actions, motivations, understandings & sources of influence

8. Types of plant Conveyors, Drill rigs &drill sharpening, Mowers & slashers, Cranes & hoists, Lathes, Band& circular saws, Tip trailers, Cremators, Sweepers, Augers, Grape presses, Boilers & pressure vessels, Compressors & pumps, Sanders, Automotive assembling equipment, Concrete & brick cutting saws, Packaging machinery, Pumping stations & treatment plants, Timber handling machinery, Bulk handling equipment, Rolling mills, Vine pruners, Hydraulic pickers, Seeders, Graders, Concrete mixers, Wool presses, Hay presses, Lifts (mining), Lifting equipment (health),Lifters (bins etc), Meat processing equipment, Winches, Train cleaning equipment (including robotics),Industrial furnaces & ovens, Granulators, Food washing, handling, mixing, processing, extruding, cutting, shredding, peeling, drying, pickling, blending, juicing, filtering, vibratory sizing, cooking systems, Metal roll forming, High precision tooling machines, Drill presses, Mulchers, Post hole diggers & drivers, Glass cutting, lifting & handling equipment, CNC plasma & oxy cutting & drilling equipment, Robotics & special purpose machinery, Rock crushing

9. Levers & who pulls them - marketability • OHS is addressed if compatible with function, productivity or OHS features marketable in own right (internally or externally driven) It is a wonderful safety feature but it's also part of the actual process of the micro-finishing. If you didn’t remove that dust the actual product wouldn’t be as effective … just the dust all over the place.(Manufacturer of acrylic sanding machine) We sell productivity solutions, & the operator’s well-being & security is critical in that productivity equation … so the operator knows thatthey are operating a machine that is going to produce at a certain output at a certain quality, & they are going to be safe in operating that machine.(Manufacturer of high tech, high precision & high cost machine tools)

10. Levers – marketability (continued) but A slasher is a prime example I suppose or even a posthole digger, you cannot completely guard it otherwise the thing becomes non – it doesn’t function … we’ve looked at the ways of doing it & we do supply optional guarding as far as chains & that sort of thing to prevent things flying out & hitting you. Ultimately if you had that as standard you wouldn’t sell it, & that’s what it comes down to now. (Manufacturer of agricultural machinery)

11. Levers – (large) procurers, distributors & suppliers of manufacturer’s product Certain international, multinational companies …that we deal with have their own specs & usually they are higher than what the regulatory people want, so we have to take these sort of things into account … People like Kraft & Nestle or whoever it might be … They’re like the army, they have their own manuals that are this thick, & they deal with hygiene & safety, & construction methods, & radiuses on welds, & you name it.(Manufacturer of food processing equipment talking about large procurers) A few of our dealers were concerned about post drivers they’re now selling … where they stood if there was an accident. So we went & took our post driver off the market … & produce one now with a safety cage on it … but They’re also the weak link of the chain. If they told a customer “look I’m not going to sell you this, this way because it’s not safe” & that’s it, then we wouldn’t have problems a lot of the time. But often the customer says … “I want this machine but I want this added to it or this taken off it” & the dealers are often just too agreeable.(Manufacturer of agricultural machinery talking about relationship with distributors)

12. Levers – suppliers of key components Probably the reason why we haven’t gone to those type of seminars [ones from OHS authorities] is most of the time they charge for them so the seminars we tend to go to are component suppliers. They do drive their product but … it is a seminar on safety & risk assessments. And a lot of them, because they are component suppliers they can relate to our business a lot better than something like WorkCover.… They went into risk assessments & what you should be looking for. Mainly from an electrical point of view because that was their product. Then they come up with a range of products & ideas where you can use them. Different applications & why they're good for this or that. And how they actually meet the standards. … But I think if we went to a seminar which was predominantly regulations I think it would just be a little bit too heavy & you wouldn’t get that much out of it.(Manufacturer of packaging machinery)

13. Not leveraging – OHS regulation • Enforcement: • lack of engagement with manufacturers • ‘workplace focus’ & ‘jurisdiction focus’ – not dealing with unsafe imports & interstate • ad hoc for death & serious injury - may follow upstream (more likely with employer) • workplace/jurisdiction focus + ad hoc = no level playing field – undercutting • General duty & risk management standards - offer little direction, ‘vague’ & ambiguous

14. More levers – technical standards (‘commercial value’, liability ‘protection’, specific advice) What drove him [the company founder] initially was not occupational health & safety legislation, it was the standard. There was the need to market the product & the standard had greater commercial value… I suspect also if the local OH&S regulations, or other regulations, are not going to add to that commercial value then they will never be considered as important from the point of view of making the business tick.(Manufacturer of lifting equipment) We seek to comply with standards because it's a standard, it's a benchmark which is established as being good practice. Now it would be lunacy for us to do equipment that wasn’t complying with the Australian Standards on the guarding of machinery. It would be lunacy because if somebody got hurt it's almost one step to the next step negligence.(Manufacturer of special purpose machinery).

15. More levers – overseas’ law Moving into the European Union we comply with that too now. Once you start exporting you're in a whole new ball game & you have to comply with certain things … so we went through & we checked out all the directives & so forth & we comply with 3 major directives & one is the safety of machinery, one is the low electromagnetic voltage …(Manufacturer of sanding machinery)

16. In summary • Each firm’s operating environment & relationship to local & overseas market for the type of plant produced determines whether, & if so how, OHS is addressed • Need to rethink & reshape OHS regulatory levers (type & content of provisions) & ensure all who pull levers are pulling for OHS (enforcement policy & practice)

17. What needed to underpin production of inherently safer plant? • Legal standards that encourage: • comprehensive attention to risks (not just safety) – provide direction • attention to risks in installation, clearing blockages, mechanical breakdowns, servicing etc (not just properly functioning) -‘life cycle’ • good quality, user friendly information – content, format & style • testing & examination for effectiveness of risk controls & residual risks (not just function) • ‘putting ‘selves in position of end user’ (not just ‘the customer’) - experience using or maintaining &/or actively engage with end users • Enforcement that recognises operating context & need for level playing field - engage with network of plant producers, importers, suppliers, influential procurers & other stakeholders for particular plant

18. Some examples • Plant surveillance – communication with duty holders re legal obligations; provide self-audit tools to assist ‘learn how to comply’; advise of follow up requiring evidence of compliance; follow up with random sample & publicise through network • Focused interventions – work with relevant parties to define OHS problem precisely, explain why it’s a problem & determine OHS outcomes; ask duty holders to ‘sign onto’ & publicise action required & results through network; apply responsive enforcement to those that don’t respond voluntarily