IOSH Northern Ireland Branch

Tuesday 28th January 2003

G.S.J. Fulwell

The Way Forward in OHSMS

Contents of the presentation;• Introduction

• The Corporate onslaught in OHSMS.

• Key Performance Indicators.

• The position on Corporate killing.

• Recent developments in Global Standards

• OHSAS 18001 and Integrated Systems

• The ILO OHSMS Guideline

• IOSH international Specialist Group

• Questions.

Current position on standards;• ISO 9001 - Quality Management Systems.

• ISO 14001 Environmental Management Systems.

• OHSAS 18001/2 OHSMS management guideline.

• PD 6668 Integrated Management Systems.

• Environmental Management Auditing System.(EMAS).

Risk Management Standards

Standards for Corporate Accountability

The Process Based Approach.

• The new approach to “standards”;

• All new standards are no longer based upon the attainment of a prescribed level of performance but on the process based approach of continuous improvement.

( Guide 72 - May 2001)

OHSAS 18001• + Agreed by major certification bodies.• + International credibility and development.• + A standards based approach• + Benchmarking opportunity• + Aligns with other standards - integration

• _____________________• - Not an ISO standard.• - Commercially based activity• - Auditor Competence not defined• - Development of the global ILO guideline• - Application to sme sized undertakings

Strategic approach formula;

PLAN

ACT

CHECK

DO

Continual Improvement

Process of enhancing the OH&S Management System, to achieve improvements in overall occupational health and safety performance in line with the organisations policy

(OHSAS 18001)

The Management Systems Approachin the Workplace.

EMS

QUALITY

OHSMS

Risk Management influences the

process

Continuous Improvement

Standards.

Legislation.

Policy. Minimumonly.

Cooper 1998

Integrated Management SystemsRisk Recognition

Risk IdentificationExternal Market

Environment

Risk RankingRisk Mapping

Opportunities Assessed

Risk SurveysRisk Controls

Business StrategyPlans Developed

Integrated RiskResponses

Business ProcessImplemented

Audit and Compliance

ManagementReview

Risk Management Tool Business Process

The Manufacturing Environment.

INPUT. PROCESS OUTPUT.

AssetsRaw Materials.Supply Chain Management.Research & Development.Finance and Investment.Training and Development.Energy.

Product orServicesMarketingDistributionWasteFinance

Combined or Integrated?

• Combined v Integrated

SH E Q

MS MS MS

SH E Q

IMS

The Integrated Strategy• Policy

• Planning

• Implementation and Operation

• Performance Assessment

• Improvement

• Management Review

PLAN

DO

CHECK

ACT

Common Elements of an Integrated System• Element 9000 14001 18001

• Policy 5.1, 5.3 4.2 4.2

• Planning 5.2, 5.4, 7.2 4.3, 4.4 4.3, 4.1

• Implementation 7.2-7.5 4.4.6 4.4.5,4.4.6

• & Operation 4.2 4.4.5 4.4.3

• Performance 8.2 4.5.1,2,3. 4.5.1,2,3.

• Measurement 8.2.2. 4.5.4. 4.5.4.

• Improvement 8.5.2,3 4.5.2. 4.5.2.

• Management 5.6 4.6 4.6

Key features of the approach;* Common organisational objectives

* Clearly defined responsibilities

* Common objective of continual improvement

* Based upon the plan,do,check,act approach

* Driven by top management

* Implemented as a project based approach

* Based upon a business risks approach

* Cross department ownership and commitment

Fulwell 2003

Definition of an Audit.

A systematic examination to determine whether activities and related results

conform to planned arrangements and whether these arrangements are implemented effectively and are suitable for achieving the

organisations policy and objectives

3 Key stages of an audit.

• Documentation - reflects the hazards.

• Interviews - verify competence.

• Observations - implemented in practice.

International Labour Office

ILO-OSH 2001

Guidelines on occupational safety and health management systems

International developments.

• International Labour Office proposal.• technical experts met in April 2001.• ILO Council met in July 2001.• implementation programme being developed

• Alternative proposal from ISCSA.

• Strong support for the ILO from Asia/Pacific.

The role of the ILO in OHS.

International Labour Organisation.

National Governments

Legislation and enforcement policy

Organisations Health andSafety Management Systems.

ConventionsRecommendations

Monitoring Auditing

National OHSMS Protocols.

Audit

Fulwell 2001.

ILO - OSH 2001• Section 3.2. Worker participation:

• 3.2.1. Essential requirement of OSH.

• 3.2.2. Workers and their representatives are consulted, informed and trained ( including emergency arrangements ) in respect of their work.

• 3.2.3. Arrangements for active involvement.

• 3.2.4. Ensure the establishment and effective operation of a safety and health committee.

Key points of the ILO.

Fulwell 2001.

*Reciprocal observer status with the E.U..*Tri-partite organisational membership.*A United Nations Specialist Agency.*Linked to the World-Bank requirements.*Role in defining minimum standards.*Supervisory role in national legislation and enforcement policy, *International role with member countries.

Supply Chain Management.• ILO (2001) section 3.10.5. Contracting

• organizations standards applied to contractors.

• Arrangements when on site must include:

• a) criteria for evaluation & selection.

• b)communications & coordination between all.

• c)arrangements for reporting accidents/ill-health.

• d) specific awareness & training arrangements.

• e) regularly monitor contractor performance.

• f) ensure all on-site arrangements complied with.

Supply chain management.

• ILO (2001) section 3.10.4.1. Procurement.

• procedures established and maintained;

• compliance in purchasing & leasing specs..

• any relevant national laws in advance.

• arrangements made to ensure compliance before use.

Corporate

CivilCriminal

Corporate SHE Liabilities

Corporate Liability

Maintaining Stakeholder Confidence.

Financial Times - November 15th 2002.• ABB now has 110,000 Asbestos claims.

• ABB estimates its exposure at $812million.

• Hanson has 75,000 asbestos claims.

• Hanson has currently paid out $86 million.

• Hanson receiving 17,500 claims per year.

• Business News - Sunday 19th January 2003.

• ABB pays $1.2 billion to settle the US claim on asbestos liabilities and places Combustion Engineering into Chapter 11 bankruptcy protection. Assets $812 million balance ABB.

Top Risks Facing the Organisation

Strategic These are the long term strategic aims and objectives of the organisation.

Project (These may also be considered as tactical or developmental risks). These are the change objectives, including product and process developments.

Operational These are the day to day issues that ensure continued operation of the organisation

RISK CONTROL STRATEGIESRISK CONTROL STRATEGIES

RISK AVOIDANCE RISK RETENTION RISK TRANSFER RISK REDUCTION or any combination Residual Risks will remain

OECD Principles of Corporate Governance.

• Established in April 1998 - 5 principles.

• 1) Rights of Shareholders.

• 2) Equitable treatment of shareholders.

• 3) Role of Stakeholders.

• 4) Disclosures and transparency.

• 5) Responsibilities of the Board.

OECD Guidelines for Multinational Enterprises 2001

• Follows a review of the 1976 guidelines

• Recommendations to Governments,

• Express the shared values of governments

• observance is voluntary

• principle of establishing a common position

• part of the Declaration of International Investment and Multinational Enterprises

European Commission Green Paper.

• Promoting a European framework for corporate social responsibility;

• In addition the tendency of companies to include OHSMS in their procurement…….. ……..which allows for a third party to carry out “certification” or initial approval of the contractors as well as overseeing the continuous improvement of the scheme.

• EU September 2001.

Corporate GovernanceCorporate Governance Process by which corporate bodies

govern themselves - a risk based approach

No Surprises - ICAEW

Corporate Governance• Cadbury - 1992 -reporting of control

• Greenbury - 1995 - remuneration

• Hampel - 1998 - annual declaration

• Turnbull - 1999 - internal control

• Higgs - 2003 - role of non-executives

If the non-statutory approach embodied in the code is to be successful over the long term, the code needs to retain the widespread confidence of shareholders, employees, government and others - Institute of Chartered Accountants

Internal control requirements:

• Defined structures, responsibilities and reporting.

• Defined operating procedures.

• Objectives - business, department, individual.

• Financial and other resources prepared.

• Mechanisms and measurement criteria identified.

• Formal reporting of performance against target.

Turnbull requirements

• Assessment– Objectives

• plans

• performance targets

• indicators

• Control• strategy

• culture - senior management demonstration

• Authority and accountability

• communicate to its employees

Turnbull requirements:

The annual report will:-• The board is responsible for internal controls and

reviewing its effectiveness.• On-going process for identifying, evaluating and managing

the company’s significant risks.• That is has been in place in the year.• Process is regularly reviewed.• A summary of the review process.• The process applied to deal with any significant problems

disclosed.

Accounts Digest - 417 -October 1999

Higgs Report - January 2003

• Role of Non-Executive Directors

• Ratio of Non-Executive to Executive

• Training and selection of non-executives

Civil Liability position.

The changing position

An opportunity or a threat?.

The Insurance Market

Client Broker InsurerReinsurance Market

OffshoreAccount.

Level and size of claims

Size andNumber of Claims

Number

Number andScope.

Fulwell 2002

The Insurance Market

Client Broker Insurer Reinsurance Market

WTC - $80 billionEur flood $60 billionAsbestos & stressStock Market fall = Reduced Capacity

Fire + 130%Weather +70%Theft +20%Stress +19%Commercial +100%Property +50%

Independent InsuranceWoolf ReformsClaims size & frequency

Fulwell 2002

Underwriting loss of £4.5 billion since 1993.

FLOW OF MONEY since 1991.

Catalogue of Disasters• Forest Fires in Australia and the USA.

• World Trade Centre act of terrorism.

• Flooding in the United Kingdom.

• Collapse of Independent Insurance.

• Flooding in Eastern Europe.

• Asbestos claims globally.

• Earthquakes in Turkey.

• Collapse of the global stock market

• (ie 6% value loss on Monday 27th January ).

The Changing Perspective

Historic Position (pre 2001);

Unlimited availability at very low premium, no requirement to demonstrate risk control.

Future Perspective (post 2001);Limited availability at a very high premium and

only with effective risk control.

Significant role of OHSMS now emerging.

Fulwell 2002

The Future StrategyThe future requirements will be risk exposure based;

• Identify the key exposures of the business• Establish effective risk control for the key risks• Monitor and review on-going performance• Demonstrate a clear policy and effective control• Establish liaison with the insurance provider• Adopt a policy of continuous improvement• Ensure that a risk based approach is the norm• Identify significant influencing factors• Review Management performance on a risk

basis.

Fulwell 2002

Criminal Liability

Corporate and Individual accountability

Number of prosecutions;

• Year. Company. Individual.

• 1996/97. 1490 49. (10)

• 1997/98. 1606 25. (1)

• 1998/99. 1760 27. (0)

• 1999/2000. 2253 34. (11)

• 2000/01. 2077 43. (0)

• 2001/02. 2034 55. (11)

• 2002/03.

Directors prosecution• Brian Dean, a construction company director

became the twelfth director to be convicted of work-related manslaughter at Stafford Crown Court and has been sentenced to eighteen months imprisonment.The prosecution followed a demolition accident in Stoke where a father and son were killed.

• Changed on Appeal to a Section 2(1) offence after 5 months served, Jury misdirected.

• The Client, Daniel Platt was fined £125,000 plus costs of £10,000 for breaching CDM regulations.

HSB –June 2002

Fresha Bakeries Ltd.- Leicester.• Fatal accident to two employees in 1998.

• Trapped in an oven at 100 Centigrade.

• Entered the oven to remove a broken part.

• Company fined £250,000 + £175,000 costs.

• Parent company, £100,000 + £75,000 costs.

• Managing Director fined £20,000

• Production Director fined £1000.

• Chief Engineer fined £2000.HSB September 2001.

Subcontractor electrocuted.• Subcontractor was fatally electrocuted whilst

undertaking maintenance work in an office block. Reaching into a false ceiling he touched an exposed control panel on an air conditioning unit.– Doncaster Council were fined £400,000 plus

£31,000 costs– Maintenance budget had been cut despite a

previous incident of electrocution at the site, some years earlier.

– judge made comments about “fine equivalent to the annual turnover if it had been a private company”.

EXEL fined for Workplace fatality• Exel Europe Ltd., was fined £96k for a fatal

accident when an agency driver was crushed by a reversing vehicle at the Comet operation in Corby.

• In addition the employment agency Taskmaster Resources Ltd was also fined £40k for failing to request copies of risk assessments and failing to ensure that Exel had introduced adequate arrangements for all “relevant personnel”.

MARS October 2002

Corporate Killing Legislation.

France,

Canada,

Republic of Ireland,

Australia,

New Zealand,

UK - England and Wales

United States of America.

UK proposals for reform on Involuntary Manslaughter

• a) Corporate Killing - – specific offence making companies accountable

• b) Reckless Killing - – person aware of the risk

• c) Killing by Gross Carelessness -– conduct below that expected

• d) Killing when the intention was to cause only minor injury

UK issues in Corporate Killing.• The UK has specific problems in this area;

• i) only individuals may commit a crime

• ii) requirement for the identification principle

• iii) prove both actus reas and mens rea

• iv) aggregation is not permitted

• v) vicarious liability only applies in civil law

• vi) no current recognition of corporate culture

• NOT included in the Queens Speech but not withdrawn from the proposed legislation.

Republic of Ireland.Corporate Manslaughter Bill, 2001

• A Company shall be guilty of the offence if;

• failure to manage or organise in a way which ensures health or safety of persons.

• failure amounts to conduct falling far below reasonable expectations.

• failure is the cause or one of the causes of the death of a person.

United States of America

• Concept of “respondeat superior”

• A corporation may be held criminally liable for the acts of any of its agents if an agent commits a crime within the scope of his employment and with the intent to benefit the corporation.

Canada• New Private Members Bill, C-242 February 2001• New Part XIII section 467.3 to 6 to Criminal Code• “A corporation is guilty of every offence of which

an individual could be found guilty for committing that act or omission”.

• section 467.6 (d)• Corporate fault - C$1,000,000 per day of offence• Individual fault - C$10,000 per day of offence• unsafe workplace up to 7 years or life if a fatality

The Pyramid of Sanctions.

Advice - warnings - persuasion

Fines or civil penalties

Voluntary disciplinary action.Court ordered disciplinary action

Corporate criminal sanctions

Corporate license revoked

Corporate probation.

Braithwaite 1989

Corporate Killing

• Defence of “due diligence”;

• The company falls to be judged not on its words but its actions, including the action of its employees.

Wells, Corporations and Criminal Responsibility , 2001

Corporate Killing - due diligence.• Evidence that the illegal and forbidden act was

clearly in breach of established internal policy.

• Elements;

• Specific company policy/procedures.

• Evidence that the illegal conduct was forbidden.

• Safeguards had been developed and implemented Lack of previous examples of the offence.

Wells 2001.

Longford explosion. • Longford Australia 25 September 1998

• Liquid flow into plant causes disturbance, control was not re-established

• Vessel fracture lead to hydrocarbon release, Explosion and Fire

• Casualties– 2 Killed– 8 Injured

• Fire extinguished 27 September

• Victoria gas supply cut off for 2 weeks

Culture• The commission noted:

– “over time a culture developed whereby it became normal to operate the plant in alarm. This culture developed despite the fact that the alarms existed for the primary purpose of alerting operators to that which was abnormal…The consequence was that the protective purpose of the alarms was lost… The culture of operators regarding the operation of the plant in alarm was, in our submission, a contributing factor to the disaster.”

Conclusion

• The jury found Esso guilty of 11 breaches of workplace safety, including a failure to train staff properly and a failure to provide properly trained supervisors at its gas plant.

A$ 2 million fine and A$1 billion class action to follow

• Justice Philip Cummins said the blast that killed two workers and shut down Victoria's gas supply for two weeks was no mere accident - it was avoidable and it was all Esso's fault.

• "The events of September 25, 1998, were the responsibility of Esso - no-one else," Justice Cummins told the Supreme Court. "The cause was grievous, forseeable and avoidable. The consequence was grievous, tragic and avoidable. To use the term 'accident' denotes a lack of understanding of responsibility and a lack of understanding of cause."

BP - Prudhoe Bay, Alaska• Major Corporate threat following an explosion

• Group = BP - ExxonMobil - ConocoPhilips

• BP operates 1600 oil wells for the group

• Alaska Oil & Gas Conservation Commission

• Largest oilfield in North America

• BP already on “corporate probation”

HSE - FOD - Risk Control Indicators;• Falls from Height• Workplace Transport• Musculoskeletal Disorders (MSD)• Stress• Slips, trips and falls on the level• Hand, Arm Vibration, (HAV).• Noise.• Occupational Asthma.• Management of Risks.• Working Environment. Source HSE, 2003.

Fatal Accident Manufacturing

• YEAR Manuf. Constr. Total

1997/98 61 80 274

1998/99 69 65 253

1999/00 41 81 220

2000/01 50 105 292

2001/02 47 79 249

2002/03 - ytd 21 36 110As at 30/09/02 = 6 months.

Source - HSE Statistics dept.

Fatal Accident Causation 2001/02• Contact with moving machinery - 22• Struck by falling object - 43• Struck by Moving Vehicle - 40• Injured whilst handling - 1• Slips trips and falls - 2• Falls from height - 68• Trapped by collapsing/overturning – 8• Drowning or asphyxiation - 11• Exposure to fire/explosion - 8• Contact with Electricity - 12• Others kind of accident - 22

Current issues in OHSMS

• Civil Liability premium increases

• Corporate Killing

• Enforcement Management Model

• Accident Investigation

• Employee Representation

• Manual Handling survey by the HSE

• Directors duties

International Specialist Group.

1.1. Approved by Council in September 2001Approved by Council in September 20012.2. Comprises two separate Working PartiesComprises two separate Working Parties

IOSH Specialist Groups;• Municipal and Public Services.• Off-Shore Group.• Construction Group.• Environmental Group.• Healthcare Group.• Fire Risk Management.• Railway Safety Group.• International Group.• Safety Sciences Group.• Education Group.• Consultants Group.• In progress - Airways and Telecommunications.

International Specialist Group

• 2 separate Working Parties;

• Internal Working Party - focus upon the membership services required to support a global organisation and its development.

• External Working Party - focus upon the development of the Institution into a global organisation and the establishment of a network of international contacts.

International Group Objectives *Develop an international information web site.

*Review the International membership criteria.

*Publish 2 Learned Journal articles.

*Establish a network of international contacts.

*Establish a comparative qualification base.

*Increase the International Group membership.

*Investigate potential questionnaire in SHP.

*Monitor international developments.

*Present at the IOSH Conference.

*Advise IOSH of global developments in SH&E.