Contractor Management

1. Contractor Management ORC Asia Pacific H,S&E Forum July 15 & 16, 2010 – Australia Case Study 3 – Contractor Management Program Rommel Dantoc, EHS, Workplace Injury Advisor Baxter Healthcare

2. Objectives Case study Advantages and disadvantages of contracting Legal Obligation Program implementation System Tool

3. Who are we? Baxter Healthcare develops, manufactures and markets products that save and sustain the lives of people with haemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.

4. Case Study 1200 employees ANZ 35-45 Contractors Approximately 60 million dollars worth of expansion projects across ANZ Contract management paper based system All contractor managers had to develop their own system to keep track of their own contractors.

5. Advantages of contracting Enabling the organisation to divest non-essential tasks and concentrate on core business Reducing the workforce and associated infrastructure, taxation and overheads Achieving cost-savings through the competition amongst those tendering to deliver a service and the flexibility of only purchasing ''labour'' when it is actually needed Enhancing flexibility in the provision of a service in terms of delivery times and accessing specialist expertise not available within the organisation Enabling an organisation to expand operations without the expensive capital expenditures that might otherwise be involved Reducing union influence in the workplace, especially if the contract workers occupy a strategic position.

6. Disadvantages of contracting One of the biggest, if not the most significant, potential problem associated with contracting is the adverse effect it can have on the health and safety, not only of contractors themselves, but also those working alongside them or other persons visiting the workplace. Too often poor management of contractors has involved costs to the organisation through the occurrence of accidents or incidents. In Australia, as elsewhere, contracting has been linked to a number of serious incidents, as well as long-term degenerative injury and health problems. This in turn has drawn the attention of regulatory agencies leading to, amongst other things, an increasing number of prosecutions.

7. Legal Responsibility (Organization) has a legal duty of care for all personnel who are on the premises or work on the organizations behalf. All contractors and visitors must be made aware of all unexpected hazards, whilst on the premises. The duty of care to contractors cannot be contracted out. The secondary responsibility is to ensure that all personnel (contractors and visitors) who come onto the premises must comply with OHS statutory and non statutory legislation (Standards, Codes of Practice) and organizational OHS Management System requirements.

10. What were the gaps? Lack of ownership and accountability No standardization Inconsistent safety induction training Companies expectation and legal requirements Training, qualification and licenses Non-centralised filing system Audit trail Security

11. Policy and Procedures Systems and Tool Training Ownership and Accountability Communication Dismissals and discipline Filling the gaps

12. Contract Management Program Program Policy and Plan - Contractor Management Policy - Objectives of the program - Responsibility, targets and performance indicators – all stakeholders involved in the program

13. Contract Management Program Implementation - Consultation and communication - Training (contractor management personnel) - Documents and records - Risk Management (Including Emergencies)

14. Contract Management Program Measurement and Evaluation - Audit - Consultation - Inspections - Review of performance indicators Management Review - Annual review

15. Selection of our Contractors Once an organization has decided to outsource certain work it is just as important to select contractors who have proficient knowledge and competence of their own safety management system. It is highly recommended that contractors who are selected for major contract work should be certified to AS/NZS4801:2001 by a Jas-Anz accredited body (refer to www.jas-anz.gov.au for confirmation of organization certification).

16. Classification of Contracts Prior to introducing a contractor to the organization, the contract manager must classify the level of the contract using a risk assessment approach. By focusing on the level of risk, each contract will be tailor-made for each job and contract managers will have a clear indication of the occupational health and safety (OHS) issues that need to be managed. The classification will determine the level of detail required in the contractor’s health and safety management pre-selection and management activities required.

17. Service Level Agreement Specific SLA’s relating to Safety:- The following are required at the stated intervals: Accident/near miss reports - as and when they occur Accident statistics – monthly Safety audits - monthly Staff health and safety seminars - monthly.

18. How the system works Go to www.contractormanagement.com.au Log-in to client access with username and password Create new contractor details – enter:- Contractor Organization Name Principal First Name/Surname Email details The Contractor Management System will automatically send email and link to contractor to complete the details on the Contractor Management Web Database. The contractor’s initial status on the database will be set automatically to “Active – Incomplete”. This means that the following details have not been completed:- Contractor Organization details Insurance details (Public, Professional, Workers Compensation) OHS Management System details (contract OHS Management Plan including risk management documents specific to contract work.) Employee/sub contractor details (licenses, training etc). The (Organization) on-line link to the Contractor Management Induction will be sent out for completion by all contractors (including employees of contractor/sub contractors). Conduct and document risk assessments in conjunction with contractor where the services delivered by the contractor creates a potential risk for any person at the workplace ie. the contractor’s personnel, (Organization) employees or visitors). Once the contractor completes/uploads required documentation, their status will be changed to “Active-Complete”. The (Organization) Contract Manager should check the contractor’s details/documents prior to use (electronic copies of documentation are available on the Contractor Management Web Database). The Contractor Service Level Agreement should be prepared and sent out for signature. Contractors should not be used for contract work until their status is “Active-Complete”.

29. Challenges Who owns the system? When contractors don’t comply? How much control do we have over our contractors? New contract managers What is the scope Initial setup

30. SafetyNet: Contract Management Web System tool Advantages Tracking Communication and consultation Centralized data base Accessibility Auto notification Disadvantages Effectiveness is determined by the user and contractor System might not be as user friendly for contractors Lengthy process

31. Presentation Overview Developing simple policy and procedures Choosing the right contractors Risk Management approach Use the Right tool Ongoing training Review, evaluate and monitor