Health and Safety is in the headlines, with a major corporate collapse and three firms denying breaches at a court hearing into the 2005 Buncefield oil depot blast that injured 43 people. Unsurprisingly, as Colin Chinery reports, H&S is now a hot issue, high on the boardroom agenda.
Network Rail’s 30% cutback in track renewal is arguably the biggest contributor to the collapse into administration of rail contractor Jarvis. But while the future of 2,000 jobs hangs like a sagging overhead line, another suggests itself; health and safety – reputation and brand implications of corporate failure.
Ever since 2002 the name of Jarvis has been associated with the Potters Bar tragedy in which seven people died and more than 70 were injured in a 100mph derailment.
A Health and Safety Executive (HSE) report found the main cause of the accident was poorly maintained points. Jarvis, along with Network Rail, later admitted joint liability for the accident.
“PLCs are now spending huge amounts, building brand images and trust. And any breach of health and safety can have a very significant impact on the reputation of that business,” says Lee Pickering, Sector Sales Manager, Manufacturing at Arco, Britain’s largest safety distributor with expertise in safety products and work wear. With 32 work-related deaths in manufacturing in 2008/9, the impact could be described as ‘significant’ for life and limb too, needless to say.
In Lancashire an employer was fined £10,000 after a worker narrowly escaped being killed in an autoclave machine explosion that shot a five foot iron girder across the factory. The worker escaped serious injury only because he had taken an early coffee break. The company said an HSE inspector had “failed to service the machine for more than a decade, after cancelling its annual shutdown for routine maintenance. It also ignored its legal duty to make sure a routine inspection was carried out by a qualified inspector.” In Cornwall an equipment manufacturer was fined £3,000 for repeated safety offences that exposed workers at risk of serious injury. An HSE inspection found machinery without safety guards or automatic power cut-off devices and, despite initially complying with a previous improvement notice, the firm then committed further breaches of safety.
Boardrooms on alert
Management, says Pickering, quoting business guru Peter Drucker, ‘is doing things right; leadership is doing the right things’. “For me that is key to how manufacturing companies and UK PL C boardrooms now operate.” Twelve months ago reports were claiming that health and safety was slipping down the corporate agenda, part victim of manufacturing’s recessionary pressures. The charge still lingers but as a general indictment it is now hard to stand up.
“There’s been a concern that health and safety might suffer in tough economic times when manufacturing resources are hard pressed but we have found no evidence,” says Neal Stone, British Safety Council’s Head of Policy & Public Affairs.
“Have we got an underlying concern that health and safety has slipped down the business agenda? No we haven’t.” An EEF survey reports health and safety moving up the boardroom agenda, a regular item for 81% of boards compared with 58% in 2006. And over this period 80% of companies are now spending more time on H&S. Leadership of health and safety is very much a hot topic, with companies exposed to prosecution for corporate manslaughter, and individuals found guilty of health and safety offences facing imprisonment.
“Our survey confirms there’s been a sea change in director involvement – active leadership is now very definitely the norm, not the exception.” says Steve Pointer, Head of Health & Safety Policy at EEF . This is a view endorsed by Pickering. “We’ve certainly seen a massive shift over the past two years,” he says. “I’d be surprised if you could attend any board meeting in any significant organisation now and not see health and safety as an important agenda point and a significant discussion point.”
Forgemasters show the way
Sheffield Forgemasters offers an exemplary case study. With the largest forging and foundry facilities in the UK, covering a 64 acre site, Forgemasters has secured international accreditation, further underlining its commitment to optimum standards in health and safety.
The award of BS OHSAS 18001:2007 – the world’s most widely recognised health and safety management standard – enhances Forgemasters impressive health and safety record.
“This standard is highly sought after, so obviously the criteria were tough. But we were determined to achieve it because we believe it’s fundamental to have a health and safety management system that is top class,” says Forgemasters group health and safety director, Malcolm Collins. “It’s taken nearly two years to gain accreditation, and the award confirms we have a system that is mature and productive, with highly effective working practices.” Forgemasters is one of just 14 large scale open die forging companies in the world and the only one of its kind in Britain. And as the world’s only independently-owned forgemaster it continues to supply an increasing global demand for high quality engineered products to key industries such as defence, nuclear, oil and gas exploration, power generation, marine and construction.
“Health and safety is very important,” says Collins.
“This is a very high risk industry and the systems and procedures have to be exact to match the risks.”
Good for business
“We were assessed over a two year period and it was two years’ hard work,” Collins continues.
“Before this we spent six to nine months preparing, so it was getting on for three years from starting work on accreditation to getting it. But of course there were benefits along the way.” Effective health and safety management is self-evidently good for business. “But at the end of the day an employee ought to be able to come to work secure in the knowledge that he is not going to be maimed or injured,” says Collins.
“And the more systems in place to ensure this the better.” But putting the actual engineering solutions into place is not the most daunting of the challenges. “The most difficult – and the one always on-going – is getting the people to follow the systems and understand the need to follow the systems.” Even so – and unsurprising in view of SFM’s exceptional workplace culture – employee response was excellent. “We have a history of engaging employees in projects to improve performance, so they are used to working with management.”
The costs of failure
But managing health and safety effectively comes at a very high cost. “There’s no doubt about that,” says Collins, “but the price of not following H&S procedures and not getting it right far outweigh the costs of doing it.” Aside from obvious operational, staff retention and morale issues there is the cost of compensation – now potentially very high.
“Insurance costs are reflected by the accident performance as well, and these can be tremendous while the costs of litigation are absolutely astronomical. And it’s not just the fines. The costs of engaging a solicitor and a barrister these days are very very high.” Lee Pickering concurs. “At the PL C level especially, where the size and scope of what they are doing means the impact is significant, there’s now a real and increasing focus on how the health and safety environment can help drive costs out of the business. Reducing insurance premiums and the impact of legal costs is an area coming increasingly under the spotlight.” It goes without saying that managers do not want to see their staff harmed during the course of work, says Steve Pointer. “But good health and safety is also good for business. It can reduce the £13bn lost each year to sickness absence, constrain insurance premiums, improve quality, and protect that most valuable asset – reputation.
“It also defends the company and its directors against the threat of prosecution. New penalties for health and safety offences mean that offences committed by an individual – including a company director – can in serious cases be punished by imprisonment. Companies need to cut through the bureaucracy and take practical action to protect their business and their employees.” Pickering says he tend to classify the H&S culture of manufacturers in five distinctive ways:
1 Pathological. “These approach H&S from the point of view of ‘Who cares, so long as we don’t get caught?’ Such cowboy businesses are thankfully rare these days.”
2 Reactive. “Typically H&S is seen as important, but the only time action is taken is after an accident.”
3 Calculative. “A business that has the systems in place to manage workplace hazards. Many businesses, both small to medium sized and also large PLCs come under this heading.
They will have a robust management system and probably feel this encompasses all the risks in their workplace.”
4 Business that take a pro-active approach. “These recognise that they have captured the significant risks but continue to work on every problem they come across.”
5 “Finally, companies such as BAE Systems, Northern Foods, Saint-Gobain Glass – businesses really striving to achieve what’s referred to as an exemplary or generative approach. And there’s a real shift in our customer base towards attaining these exemplary standards within their businesses.”
A key here says Pickering, is director awareness of personal liability for any involuntary manslaughter of an employee.
“Boards are now cascading down to their management teams a requirement to have health and safety at the forefront of their minds. And where plants are unionised we are increasingly starting to work – and successfully so – with trade unions. It’s very important at every stage to get their buy-in.”
Say ‘Yes’- Say ‘No’
Already the trade union Unite and paper industry employers, the Confederation of Paper Industries (CPI), have come together in a campaign to improve health and safety in the industry. Paper related industries continue to see an unacceptably high level of serious machine accidents, says Unite, and over the last two years there have been several deaths and a number of very serious accidents in paper mills, corrugating plants and recovered paper operations. This despite a fall in minor accidents.
Now Unite and the CPI have launched a ‘Say No’ and ‘Say Yes’ campaign. Saying ‘No’: not taking risks, not doing dangerous work, not cutting corners and not putting production before safety. ‘Saying Yes’: acting on health and safety complaints and queries, working together on risk assessments and safe systems of work, reporting near misses, conducting joint accident and incident investigations, and undergoing joint health and safety training. And with 2.5 million working days lost through work-related injuries and ill health, recognising that good health and safety is good for business, says Unite.
Achieving an edge
Now more than ever businesses must not lose sight of the importance of keeping their workforce safe and healthy and all risks properly managed, says Neal Stone. In a very competitive climate those businesses that manage their health and safety issues effectively will have an edge.
“In some ways our concern is for the future.
When the economy picks up there may be an increase in the workforce and it’s crucial that those coming in are made aware of the risks and given the training and the competence. And this will have to be done very quickly. For us this is a bigger concern than the current H&S state.” Meanwhile EU regulations are the major issue for the EEF , and are likely to remain so for a long time. “The basis of the start out law is good, but now EEF is saying the EU is ruining it by coming out with many layers of complexity,” says Steve Pointer.
“This is confusing the picture. We are getting some really bizarre directives and we are trying to influence that. One, which came into force in April, is on optical radiation – essentially a ‘bright lights – don’t look at them!’ type of regulation. This is going to produce problems for manufacturers in areas like welding flash and related issues.
“There’s another on electro magnetic fields which will again affect welding, as well as areas like plastics and metals processes. And we are just going to be getting more and more. It’s what you get with all policy makers – if you leave them to it, they keep producing legislation.”
No more gold plating
Is this another case of implementation driven by a singular British bureaucratic zeal? “There are differences between member states about the way the laws are enforced, there’s no doubt about that. Some countries do implement very strongly and it’s not just the UK – Germany notably does,” continues Pointer.
“But some of the more recent accession states are at a very, very different stage. So it’s not a case of Britain does it and others don’t, to nearly the same extent.
“I think we’ve got away from the gold plating of legislation where the directives said such and such and we’d add a whole bunch of stuff on top and pass it into UK law. That’s not happening now, but there’s no doubt we are enforcing it far more strongly than some member states.” According to Malcolm Collins there are some “daft things in the system, but by and large I don’t think we should be too frightened of health and safety legislation. If it’s phrased clearly, and people understand what they have to do, it can only make the workplace safer in the long run.”
And here is a core issue. Explanatory clarity – or rather the want of it – is a recurring criticism on H&S as in others involving manufacturing/government agency interaction.
“There is a great deal of guidance, much of it freely available on the web. And this is both a good thing and a problem at the same time because there’s so much to wade through to find the specifics you need,” says Steve Pointer. “This is particularly challenging for an SME . If you’ve got the time to sit on the web and work your way through everything, it’s all there. But, most SME ’s simply don’t have the time to do this.
“This is a big issue; cutting to the chase and saying, ‘OK you’ve got me. I know I’ve got to do this, what do I do, and quickly?’ It’s needing someone to talk to.
There are Government helplines and these do indeed help to an extent. But they only go so far. Otherwise it’s going to consultants, and there are some good consultants and some pretty shoddy ones.
“It’s very difficult for an SME to access this area, knowing what to ask, getting the right answers and getting value for money out of it. This is the core issue.” Lee Pickering agrees. “There’s far too much legislation for everybody to understand. The HSE has a fantastic web site that carries a lot of information, but we feel it could be simplified. And we’d like to see the HSE within in the market place and being seen as more approachable for advice.
“I suspect that at the moment most SME s and maybe some of the PL Cs see the HSE as enforcers of legislation rather than consultative type people with whom you can share a problem. We’d like to see a shift in this.” His point is taken up by Neal Stone. “Small business can find it very difficult to identify where they should go for accessible, reliable, proportionate and affordable health and safety advice. The signposting needs to be improved immeasurably. If manufacturers are spending a disproportionate amount of time trying to manoeuvre through complex health and safety rules it is not good for their business or their workers.
“And arguably it does not add one little bit to promoting health and safety.”