In the last post, I looked at OSHA’s apparent about face on its policy of publicly calling out companies that violate safety regulations. Under the Obama Administration, OSHA sent out a news release whenever it hit a company with a large fine, but that stopped abruptly when Donald Trump was sworn-in.
The famous actress Mae West said, “Too much of a good thing can be wonderful.” Maybe so, but news from Australia indicates that putting too much emphasis on reducing lost time injury statistics is producing some less-than-wonderful unintended consequences. Continue reading “Gaming The Injury System: Australian Postal Services Gets Called Out”
I have had several requests for HazMat and HazCom training recently and have found a lot of confusion in what companies were actually looking for. In talking to some colleagues, I realized that this is a fairly common problem. Companies all need to provide OSHA HazCom training and ones that ship transport or receive hazardous materials need to provide DOT HazMat, but they may not know where one stops and the other starts. It is understandable because they overlap and a lot of classes are hybrids of the two. Continue reading “HazMat Prep and Response Training”
Operating procedures are a key part of the offshore oil and gas Safety and Environmental Management Systems (SEMS) Rules. If you think of SEMS as a true system, with interlocking parts, operating procedures are the glue that holds the parts together. It is where:
- Hazards analysis is applied to the actual scope of work,
- Specific skills, knowledge, training and safe work practices can be identified and applied, and
- Mechanical integrity has real world meaning (is the equipment or tool fit for purpose, when used?).
New doctors take an oath to “Do no harm.” In safety and occupational medicine, the challenge is to not implement new rules that wind up creating new and potentially worse problems. We’ve seen time and time again that the Law of Unintended Consequences can be unforgiving. Continue reading “NFL Lessons on Occupational Medicine: Law of Unintended Consequences”
Let me share with you a blog that I provided to the American Society of Safety Engineers on some best practices to consider as you set up an injury management program. You can find the full post here.
I am a strong believer that safety departments do a much better job on the prevention side than in reducing the extent of injuries after they happen. What many don’t fully understand is that there is a cost to injuries, but a failure to address the injury properly after it happens can make that cost skyrocket. Continue reading “5 Steps to Effective Injury Management – Blog Post From ASSE”
Google the phrase “Safety starts at the top” and you will get more than 6,000 results. We automatically accept that the CEO sets the tone on safety in a company.
What if the people at the top don’t know the true state of safety in their organizations? DNV GL just released a study that makes that point crystal clear. The report, SHORT-TERM AGILITY, LONG-TERM RESILIENCE, looks at a lot of issues facing the oil and gas industry as it attempts to recover, including the impact of intense cost cutting on overall safety. DNV GL’s survey of executives found that more than half expect to continue to lay off workers in 2017 and one-third expect to reduce spending on training and competency systems. Only a handful expect to increase spending on health, safety, and environmental programs.
Here’s the most interesting part of the DNV GL study – They asked different levels within organizations whether cost-cutting initiatives were increasing health and safety risk.
Only one-in-10 of the executives thought cutbacks in the company had increased safety risks. However, roughly one-in-four of the people who were closest to the ground – either business unit heads of non-managers – thought there was increased risk.
What does this mean? There are a couple of scenarios. Both spell trouble:
Scenario One: The heads of units and rank-and-file workers overestimate the risk. That is natural. Good unit and line managers worry about risk a lot because they are directly responsible for controlling it. Cuts came to programs they were directly involved in, so they felt them directly. Let’s also accept that some safety programs may not have been all that effective in the first place and cutting them doesn’t materially impact risk. The danger here is that, if unit managers and people in the field overestimate risk, the top executives have failed to communicate why and how their companies are going to run lean without sacrificing safety.
Scenario Two: Oil patch execs don’t have a true feel for the safety risks in the field. The danger there is even greater, because the people who run the companies may not have enough visibility on their exposure to accidents, injuries and losses. Either way, it could spell trouble.
Part of the problem is that top execs usually look at programs (budgets for safety may not have been cut as much as other parts of the company), stats (usually recordable injuries and time away from work, which should be lower if there is less work and you aren’t hiring inexperienced employees). As the study points out, part of the problem is:
the distance between the boardroom of the budget-setters and the risks in the field. Senior management often have good sight of formal indicators (such as lost-time injuries or days away from work) but can sometimes be too far from operations to see things like corroding steel,failing pipework, structural problems or workforce overload.
However, we are now three years into a serious downturn. Maintenance and replacements have been deferred. A lot of the tools that give executives objective visibility into field conditions, like audits and inspections, have been reduced, if not cut. If the company relies on contractors, survival has meant requiring those contractors to make their own deep cuts, forcing them to figure out how to make ends meet.
The disconnect on safety perception between the C-suite and the people who are closest to the work is not unique to this downturn or even oil and gas. It shows up frequently in surveys of every industry. A 2010 survey of company culture on Occupational Health and Safety (OHS) in Australia asked people throughout company structures
about their safety programs. About 85% of the Owners and CEO’s said they agreed or strongly agreed that “Top level management demonstrates a commitment to OHS.” Down at the field or specialist level, that number fell to less than 60%.
Some of this has nothing to do with safety and everything to do with the way information is shared in organizations. There is a popular pyramid graph that shows how much bad news is actually shared within an organization. The message is that only about four percent of the problems experienced in the field actually make it to the CEO’s desk. The warning is that no one wants to bring the boss bad news.
As oil and gas recovers, companies put more crews in the field, new people get hired and equipment utilization goes up. The potential for incidents related to equipment failures, over-work or lack of training goes up the way too much pressure can find a weak spot in a balloon.
CEOs and their executive teams need to be actively engaged in identifying risk and addressing weaknesses. Unit managers need to be honest about what they are seeing in the field. Above all, CEOs need to invest in communicating with every level of their organizations so they have a true picture of their exposure and ensuring that no one is afraid to bring bad news to their doors.
A Federal District Court says the Federal government does not have the authority to cite and fine service companies under the offshore safety and environmental rules. If the ruling stands, it would be a blow to one of the most aggressive enforcement interpretations that followed the Macondo disaster.
Late last month, in the case of Island Operating Co Inc v. Jewell et al, Judge Rebecca Doherty ruled that the government does not have the legal authority to cite drillers, services companies and other contractors under its offshore oil and gas safety regulations.
As background, the Bureau of Safety and Environmental Enforcement (BSEE) investigates offshore safety or environmental incidents. If a violation is found, BSEE would write a Notice of Incident of Noncompliance (“INC”) against the operator of lease-holder of the offshore property. The regulations allow BSEE to shut down the project until the violation is corrected and to fine the violator up to $42, 017 per infraction per day.
Until Macondo occurred, BSEE only cited operators or leaseholders, even if a contractor was to blame. For example, if a welding company caused a fire offshore, the operator would be cited (INC’d, in offshore terminology). However, following the Macondo disaster, the government issued INCs to Transocean and Halliburton, as well as citing BP. BSEE followed-up with an interim policy document stating that it had the authority to INC the lease-holder/permit-holder as well as “the person actually performing the work.”
Ever since then, BSEE has cited a number contractors for violations, despite questions over whether the agency had the authority to make those determinations. One of those cases went before an administrative law judge in 2015 and the ALJ supported BSEE’s position.
However, Judge Doherty’s decision reverses that ruling and says very clearly that BSEE overstepped its authority in trying to penalize the contractor in the case. You can read a very good analysis of the case done by the HaynesBoone law firm here.
What happens now?
The judge was very careful to limit the results of the ruling to this one case. She did not order BSEE to cease INC’ing contractors altogether. However, this case will carry a lot of weight and encourage challenges from any other contractors who were cited under the ruling.
HaynesBoone says the government is likely to appeal the ruling. I think that remains to be seen and depends on the new administration and the direction that the Interior Department takes. Under the laws, the U.S. Solicitor General decides what the government wants to appeal and the new administration will name the Solicitor General. This may be the type of “regulatory overreach” Donald Trump has railed against.
The whole issue highlights a problem that is unique to offshore. On land, if a contractor in the oil patch breaks safety regulations, OSHA will penalize it. If the same company does the same thing offshore, there may not be any way to hold it responsible. Some experts who say BSEE handled this interpretation wrong still say there should be some way to hold unsafe contractors accountable.
One option is for BSEE to not appeal the current ruling, but to go back and develop new regulations to address the responsibility of contractors. That would allow for public comment and a way to ensure that the government’s approach is consistent. However, the new administration has said it wants fewer, not more, rules, so addressing this issue with new regulations may also be unlikely.
Last year, OSHA pushed through one of the most dramatic changes in how companies track injuries and illnesses at work. The new injury reporting regulations required many companies to provide their annual injury and illness information electronically. Much of it would be posted online for the public to see. The rule also prohibited companies from discouraging reporting or punishing employees who do report injuries.
The changes went fully into effect at the start of this month, although OSHA still does not have the electronic submission system up and running yet. Industry has been very concerned about the potential for injury information to be visible to customers, competitors, unions or public opponants, as well being confused by the vague languge covering the ban on discouraging reporting.
Taking It To The Courts
Now a coalition of businesses that includes everyone from the U.S. Chamber of Commerce to the National Turkey Federation has sued to stop the change from being enforced. That case was filed in the federal court for the Western Oklahoma District. An earlier lawsuit is also moving in the federal court for Northern Texas. That one includes the National Asssociation of Manufacturers.
The latest lawsuit challenges the rule, in part, because the plaintiffs say OSHA may be able to collect injury data, but it does not have legal authority to share it with the public. It will be up to the court, based on the evidence, to decide whether that is the case or whether OSHA does have the authority. However, one reaons the industry groups chose the Western Oklahoma is because it has a reputation for being conservative and employer-friendly.
The Trump Administration May Have An Impact on The Case
This is one case where the timing of the rule, the lawsuit and the election may help employers. It is possible that the new administration may intervene to support the industry lawsuits. In that case, the weight of arguing that the rule should stay in place could fall on some third party, such as unions. A spokesperson for the AFL-CIO is quoted as saying that organized labor is reviewing the case now.
The biggest impact will come if the courts side with employers and say that OSHA does not have the authority to impose the rule. The U.S. Solicitor General, who will be a Trump appointee, will decide whether the U.S. government appeals the case. If there is no appeal, it usually means that the decision stands. In this case it would mean that the rule would be tossed out.
So there is a lot riding on the two cases. Employers should be ready to comply, but they should also keep up with the latest twists and turns as the lawsuits progress.
What The Rule Says
Under the change, establishments with 250 or more employees are requried to submit the following forms electronically :
- 300 (Log of Work-Related Injuries and Illnesses),
- 300A (Summary of Work-Related Injuries and Illnesses), and
- 301 (Injury and Illness Incident Report).
Much of that information would be available online for the public to see, minus names and other privacy-related information. Certain smaller companies would just need to report their 300A summary online. The rule also contained confusing language prohibiting companies from discouraging reporting, including a ban on certain post-injury drug testing.
What size companies are at the most risk of safety incidents? Did you say Mom-and-Pop businesses? That is what I would have guessed until very recently. It only stands to reason that, the smaller the firm, the less money to hire full-time safety professionals, adopt best practices or afford training.
But the statistics say otherwise. In fact they indicate that firms with less than 50 employees have the best safety records.
Who is has the highest incidence rates?
It turns out, mid-sized companies have the highest rates. According to the Bureau of Labor Statistics, firms with between 50 and 249 employees have the highest recordable nonfatal occupational injury and illness incidence rates. From 2011-to-2015, the Bureau found that those companies had rates of between 3.7 and 4.2 per 100 workers, above the national average for incidents and well above smaller companies.
Need help making sure your safety program keeps up with the growth and changes in your company? At Lifeline Strategies, we specialize in analyzing company approaches to safety and helping them manage their safety programs as a system that identifies their hazards and protects their workers. Contact us at email@example.com.
Why are big company rates lower?
Maybe large companies may have lower incidents the mid-sized companies because they:
Have more resources to address hazards and incidents;
Can use economies of scale to apply training and other costs throughout the company; and
May have more incentive to work safely because they have regulators’ attention, are more likely to be responsible to public shareholders and may have more union pressure.
Why are small company rates lower?
Other than the simple fact that smaller companies may be involved in less hazardous office or retail operations, their rates may be lower they have a more direct relationship between the owner and the employees. I remember the captain at one towboat company I worked with said that one reason they had a very low number of accidental oil spills was because the crew knew the costs of a spill would come out of the owner’s pocket and no one wanted to have to face him if that happened.
That captain may have put his finger on the real issue – the dynamics of organizational size. An HR executive for one of the largest oilfield services companies once told me that “small companies manage people. Large companies manage processes.”
Looking at the incident rates by size, in small companies the owner knows everyone by name. Unsafe behavior can be dealt with directly. Large companies have systems to manage safety. They can develop and implement safety through managed processes. But many mid-sized companies are stuck in the middle. They have outgrown Mom-and-Pop status, but they still think like small businesses. They haven’t adopted a systems approach to their organizations and things can slip through the cracks.
Organizational size and accidents.
It turns out there has been a lot of research in this area and, yes, size matters. Some experts in organizational behavior talk about the “Dunbar’s number” that says the upper limit on organizations is about 150. After that, we lose track of who is who, communication breaks down and organizations need more rules and systems to be effective. An interesting study titled Organizational size and knowledge flow: a proposed theoretical link proposes that at around 150, companies become less effective at sharing information internally. This leads to breakdowns in organizational structure, communications, management awareness and, most significantly, trust by individual employees.
What Should Companies Do?
Recognize that 150 is not a magic number. I have known organizations that started to run off the rails when they hit 100 employees (and a few that couldn’t handle two employees). The more important key is whether upper management still has a direct relationship with employees and whether those employees still feel like they are part of a close group.
Focus on communications. How do you share information about safety policies, incidents, and lessons learned. If the answer is, “we don’t,” fix it.
Think systems, not just people. Small companies may say, “We are safe because Bill, the supervisor, really knows his stuff.” That works when the company is small and the owner went to high school with Bill, but growing companies get into trouble when they have to rely on five or six Bills to manage crews.
Budget for systems. Too many growing companies just tell their managers to go into the conference room and develop a process for addressing a problem. Process systems need resources and, above all, management. Someone needs to be responsible for them and executives need to support them.
Make sure it is the right system/process. The approach you take needs to fit your company’s size, culture and operations. Just as companies make the mistake of thinking they can keep running like a Mom-and-Pop as they grow, they also make the mistake of adopting complex and time-consuming management systems that a consultant “borrowed” from very large company. GE’s safety management system will be a bad fit for a 200 employee machine shop, no matter how pretty the binder looks!
Don’t lose sight of safety priorities. Busy leaders need to make the time for company priorities and safety is one of them. Show up on the work site. Personally recognize a worker who has prevented an incident or privately coach one who was injured in an accident. These are all critical.
Be honest about your heroes. This is very tough for growing companies. Small companies owe their success to a small group of internal “heroes” who are willing to do extraordinary things for the company. As the company takes on new responsibilities, they are handed to that one employee who is willing to take on new tasks or work the extra hours to make it all work. Unfortunately, as the company grows,all the knowledge winds up in the heads of a select few. They become overwhelmed and risk burnout. If they leave because of the pressure, they often feel unappreciated, the company is left with no one to fill their shoes and there is no institutional knowledge. Instead, growing companies need to respect the value those heroes bring, while pushing them to create systems for sharing what they know.