The ministerial line goes like this. Businesses are being buried in paperwork and bothered needlessly by busy-body safety inspectors. The Health and Safety Executive (HSE) should stop strangling the recovery and should concentrate its fire on high risk firms, not the law-abiding, low risk majority.
So, under explicit government direction laid out in its ‘Good health and safety, good for everyone’ strategy’, the country has faced an unprecedented removal of official workplace safety oversight. And ministers, from prime minister David Cameron down, have queued to reinforce the message that resources should be switched to where they are really needed and regulators should get off the back of business.
On 4 February 2013, safety minister Mark Hoban added his voice. Commenting on the publication of two new reports that showed the government’s deregulatory plan was on track, he said: “For too long businesses have been confused by health and safety regulations which cost them money and take up time when they should be focusing on growth.”
He added: “Health and safety is important, but its focus should be where risks are high. These reports show just how much progress we have made in restoring clarity to the system, and over the coming months I'll be making sure common sense prevails.”
THE ECONOMY IS CERTAINLY TANKING...
BUT REGULATION'S NOT TO BLAME
On 8 March 2013, business minister Michael Fallon invited “businesses and regulators” to help fashion a 'growth duty' for regulators – a proposed legally-binding measure that “will require regulators to take into account the impact of their activities on the economic prospects of firms they regulate.”
A BIS news release announcing the quickie six week consultation, ‘Non-economic Regulators: Duty to Have Regard to Growth’, which “businesses are invited” to consider ahead of a 19 April deadline, said: “The proposed ‘growth duty’ will ensure that enforcement activity of these regulators, including the Health and Safety Executive, Environment Agency and Highways Agency, imposes minimum burdens that could hold businesses back, while upholding the highest standards of public protection.”
Michael Fallon said: “Regulators have a vital role in protecting the public and creating a level playing field for competition, but red tape should never restrain hard-pressed businesses that play by the rules from growing and creating jobs. The quality of information, guidance and enforcement delivered by regulators directly affects the ability of a business to grow and succeed. So I’m inviting firms to help us craft a new settlement that supports enterprise without compromising standards.”
There’s a problem with a government thesis that says regulation is what is stopping UK plc thriving. The facts don’t fit the thesis. The UK economy may be tanking, but it has long been one of the most deregulated in the industrial world. [more]
The reports outlined how the Health and Safety Executive (HSE) has responded to government demands to reduce official safety oversight and regulation, based on recommendations from government commissioned reviews by former Tory cabinet minister Lord Young in 2010 (Hazards 112) and Professor Ragnar Löfstedt in 2011 (Hazards 117).
Only the resulting oversight oversight isn’t limited to ‘low risk’ workplaces, Hazards has discovered. In an 8 February 2013 response to Hazards, an HSE spokesperson confirmed: “From April 2011, after the launch of ‘Good health and safety, good for everyone’, HSE's Field Operations Directorate (FOD) has classified its proactive inspections into 3 categories: viz inspections in higher risk sectors, inspections to 'poor performers' and inspections undertaken immediately following an investigation (where the conditions found have warranted such an inspection).
“In 2011/12, FOD undertook 21,603 proactive inspections in these 3 categories - no other proactive inspections were undertaken.”
This dramatic decline in inspections, down by over a third since the policy took effect, means there are now 37 sectors without inspectors, with no prospect of an unannounced HSE visit - at least until after there is blood on the factory floor (Hazards 120). This is a cull on top of a cull; in 2000, when the number of workplaces it enforced was considerably lower, HSE undertook over 75,000 inspections in a year.
REGULATORY OVERSIGHT While disasters that affect the public may lead to a regulatory clampdown, if the victims are just workers then the response may not be so positive [see: Worker deaths don’t count as much].
But the proliferation of HSE-free sectors aren’t risk-free sectors – some like agriculture are among the most hazardous around – and they employ most of the workforce. A Hazards analysis found that more than half of recent fatalities in HSE-enforced workplaces have occurred in firms outside of HSE’s unannounced inspection programme.
Of the 258 deaths recorded in HSE statistics from April 2011 to 21 October 2012, the nineteen months after the strategy took effect, a total of 137 (53 per cent) were in uninspected sectors, compared to 104 (40 per cent) in inspected sectors, with the remainder occurring in jobs where the enforcement situation is unclear.
High risk deception
The government’s claim that ending proactive, preventive inspections would allow resources to be concentrated on high risk workplaces is not supported by the evidence, Hazards inquiries have established.
Even some of the highest risk firms, covered by HSE’s Hazardous Installations Directorate (HID), are less likely to receive a visit since the government’s 2011 ‘Good health and safety, good for everyone’ strategy’ kicked in. HSE figures obtained by Hazards show that in 2010/11, HID created 3,622 inspection records. By 2011/12, this had fallen to 2,219, a drop of almost 40 per cent [Table 1].
There was also a small drop in inspections of nuclear facilities by HSE’s Office for Nuclear Regulation (ONR), down from 2,092 in 2010/11 to 2,075 in 2011/12, although HSE maintains this blip was because of a “diversion of resources” to investigations arising out of the 2011 Fukushima nuclear meltdown in Japan.
HSE says the overall time spent on HID regulatory activity rose marginally, up by 3 per cent [Table 2].
TABLE 1: HSE inspections fall in high risk industries |
||
|---|---|---|
| 2010/11 | 2011/12 | |
| Hazards Installations Directorate | 3,622 | 2,219 |
| Office for Nuclear Regulation | 2,092 | 2,075 |
| TABLE 2: Total hours spent on Regulatory Activity by HID | |||
|---|---|---|---|
| 2010/11 | 2011/12 | ||
| Assessment | 44,846 | 44,222 | |
| Enforcement | 13,912 | 13,061 | |
| Inspection | 164,258 | 174,040 | |
| Investigation | 46,388 | 47,767 | |
| Total | 269,403 | 279,089 | |
WON’T FLY Aircraft manufacturer Boeing has admitted the grounding of its 787 Dreamliners because of safety concerns could cost the firm as much as $5 billion. But it wasn’t a faulty battery that was at the root of the problem. In a deregulatory climate, the Federal Aviation Authority (FAA) became more of an advisory body with dangerously close links to the companies it was supposed to regulate
[see: Boeing hurt by poor regulatory oversight].
The number of local authority (LA) proactive safety inspections of high risk ‘category A’ premises, meanwhile, has fallen 44 per cent. The local authority statistics, published in HELA Paper H14/01: Inspection/visit Data Collection from Local Authorities, a report considered at HSE’s January 2013 board meeting, estimated councils will have carried out 2,560 proactive inspections at high risk premises in 2012/13, compared to 4,560 in the previous year.
The number of inspections at lower risk category B2 or C premises fell from 49,419 to a projected figure of 10,245. The overall number of proactive inspections across all premises fell by 77 per cent. A fifth of local authorities carried out no proactive inspections at all.
HSE’s ‘Delivering health and safety reform’ report, published on 4 February 2013, hinted at official concern at a dramatic decline in local authority inspections far outstripping its own withdrawal from proactive inspection. It noted: “LA regulators have also reduced their inspections from 70,700 in 2011/12 to a projected 6,400 in 2012/13 based on mid-year returns. HSE is now consulting on proposals for a statutory National LA Enforcement Code that is based on the same principles used to direct HSE's inspection activities.”
Policy on the hoof
Recent evidence suggests it takes economic or human catastrophes – of a mix of both – to drag the case for regulation and inspection back into favour. And that’s because these disasters - from the UK’s deadly Legionnaires’ outbreaks, to the horsemeat scandal, to exploding oil rigs - almost without exception have one thing in common. The regulators weren’t looking.
DISASTROUS BUSINESS COSTS BILLIONS
• After BP’s deadly 2010 Deepwater Horizon explosion, which saw it forced to sell off assets and left its share price languishing way below pre-disaster levels, the UK multinational said the still rising bill had hit £27 billion by February 2013. Offshore inspections in the UK dipped after Deepwater Horizon, as HSE switched resources to a frantic check of procedures in home waters.
• When Japan’s Fukushima reactors went into meltdown after the 2011 tsunami, so did Tepco’s finances. In November 2012, the company estimated the disaster had so far cost it £88 billion. There was a slight dip in inspections of UK nuclear installations by HSE’s Office for Nuclear Regulation (ONR) in the wake of Fukushima, as the safety watchdog did its own follow-up investigations [more].
• The 2005 Buncefield Oil Storage Depot blast – Britain’s biggest peace time explosion and the most costly industrial disaster to date on UK soil – came at an estimated cost in excess of £1bn. And while the Buncefield blast killed no-one directly, follow up work occupied so many HSE personnel that inspections of other hazardous facilities were hit for years (Hazards 95).
It is this practice of making policy on the hoof that led to meat inspections being reinstated after the horse meat scandal. Prospect deputy general secretary Leslie Manasseh, commenting on 18 February 2013 as UK foodworkers faced the prospect of losing their jobs, said: “Of all the thousands of words written about the UK food supply chain, insufficient attention has been paid to the need for good regulation, consistently applied.”
The failure of the Food Standards Agency to spot horse meat in the UK food chain came after the agency suffered the same fate as regulators including HSE, with its resources and its regulatory and inspection role gutted by government order.
In another disaster-driven policy flip-flop, HSE indicated in December 2012 that it intended to inspect all cooling towers and evaporative condensers within 18 months. This followed a period in which HSE legionella inspections dropped from 833 in 2009 to 464 in 2011. The regulatory rethink only came after two Legionnaires’ outbreaks in 2012, causing over 120 cases and five deaths (Hazards 119).
Meanwhile, even the most high risk workplaces have not seen the government promised increase in attention from HSE. Across all the most hazardous sectors, inspections fell last year.
Closing the stable door after the horse has bolted is no way to set regulatory policy. But disaster management seems to be the only evidence-based strategy this government has on offer.
Worker deaths don’t count as much
While disasters that affect the public may lead to a regulatory clampdown, if the victims are just workers then the response may not be so positive.
Professor Charles Woolfson examined the reasons for BP's safety failures in the 2010 Deepwater Horizon disaster, in which 11 workers died, and considered what lessons had been learned since the 1988 Piper Alpha disaster in the North Sea, in which 167 workers died.
“What's really startling and wholly depressing are the similarities not the differences in the basic causes underlying the two disasters, Piper Alpha and Deepwater Horizon. Although these events are separated by over twenty years, the global industry was supposed to have learned important safety lessons in the interim. Yet a major British oil multinational, BP, was seemingly oblivious to this previous catastrophic safety failure in 1988, to date the world's worst offshore disaster, occurring on its own doorstep.”
He said key among these similarities are attempts to create a business-friendly regulatory regime offshore, weak inspection and enforcement procedures, and prioritisation of commercial considerations over safety and well-being.
In January 2013, a US court approved the biggest criminal penalties deal in US history, relating to the disaster. BP said it would pay $4bn (£2.5bn) to the US Department of Justice and agreed to plead guilty to 14 criminal charges.
• Charles Woolfson. Preventable disasters in the offshore oil industry: From Piper Alpha to Deepwater Horizon, New Solutions, volume 22(4), pages 497-524, 2012.
Back to main story
The economy may be tanking…
But regulation is not to blame
On 8 March 2013, business minister Michael Fallon invited “businesses and regulators” to help fashion a 'growth duty' for regulators – a proposed legally-binding measure that “will require regulators to take into account the impact of their activities on the economic prospects of firms they regulate.”
A BIS news release announcing the quickie six week consultation, ‘Non-economic Regulators: Duty to Have Regard to Growth’, which “businesses are invited” to consider ahead of a 19 April deadline, said: “The proposed ‘growth duty’ will ensure that enforcement activity of these regulators, including the Health and Safety Executive, Environment Agency and Highways Agency, imposes minimum burdens that could hold businesses back, while upholding the highest standards of public protection.”
Michael Fallon said: “Regulators have a vital role in protecting the public and creating a level playing field for competition, but red tape should never restrain hard-pressed businesses that play by the rules from growing and creating jobs. The quality of information, guidance and enforcement delivered by regulators directly affects the ability of a business to grow and succeed. So I’m inviting firms to help us craft a new settlement that supports enterprise without compromising standards.”
The consultation document says the “primary objective” of the proposed growth duty is “to make it clear that regulators can and should be mindful of the economic consequences of their actions, thereby stimulating improvements in business experience of regulation and creating a regulatory environment conducive to growth.”
There’s a problem with a government thesis that says regulation is what is stopping UK plc thriving. The facts don’t fit the thesis. The UK economy may be tanking, but it has long been one of the most deregulated in the industrial world. In a 2009 analysis, the Organisation for Economic Co-operation and Development (OECD) ranked the UK 38th out of 40 industrialised countries in the league table of employment protection, ahead of only Canada and the US.
Since the OECD ranking was published, the UK’s coalition government has pursued an accelerated assault on these already seriously substandard employment rights. It amounts to an ideological but highly damaging attachment to an approach that has failed spectacularly to deliver economic benefits.
The TUC’s 18 February 2013 Budget submission points out: “In terms of economic growth since 2012, the UK is ranked just 158th of the 184 countries monitored by the IMF.”
There’s another grave danger in the government’s ‘growth duty’ proposal. While it “will require regulators to take into account the impact of their activities on the economic prospects of firms they regulate,” this introduces a deadly bias to the calculation.
Improving the ‘economic prospects’ of firms by slackening regulatory controls doesn’t reduce costs, it shifts them. This form of ‘cost-shifting’ has always been a consequence of inadequate workplace health and safety regulation, with Health and Safety Executive (HSE) research estimating over threequarters of the cost of occupational injuries and disease borne not by business, but by individuals, communities and the public purse.
Responding to the 8 March ‘growth duty’ consultation, TUC head of safety Hugh Robertson said: “The Health and Safety at Work Act does not impose duties if they are affordable, or profitable. It imposes duties ‘as far as reasonably practical’. If, as is often the case, employers manage to save money as a result, that is great, but it is not the criteria that we should be using.
“High quality, safe work will help promote growth, but it is a pleasant addition to the greater benefit of having a happy healthy population. To achieve that we need strong, properly enforced regulation.
“If on the other hand we believe that regulation is simply there to promote business and help profitability then we might as well just hand over regulation-setting to the CBI. Mind you, they seem to be almost doing that, as the consultation exercise asks for the views of business, but not of workers or the public. That says it all really.”
Danielle Venn. Legislation, collective bargaining and enforcement: Updating the OECD employment protection indicators, Directorate of Employment, Labour and Social Affairs, OECD, 2009. Delivering health and safety reform, HSE, 4 February 2013. Reclaiming health and safety for all: a review of progress one year on, Prof Ragnar Löfstedt, DWP, 2013.
Boeing hurt by poor regulatory oversight
A lack of regulatory oversight and the outsourcing of jobs can lead to devastating harm to a company, airline giant Boeing has learned to its cost. A series of safety scares have led to several airlines grounding their Boeing 787 Dreamliners and an official no fly order from US authorities.
Boeing's chief executive, Jim McNerney, expressed “deep regret” and said the company was “working round the clock” to restore faith in the aircraft. The firm’s woes focused attention on long held worries about outsourcing.
Bill Dugovich, communications director at SPEEA, the professional aerospace union, said his members had first voiced their concerns in 2002. “Outsourcing in general lengthens supply lines, creates problems with language and culture and is extremely hard to coordinate. You have seen a plethora of problems at Boeing. Things get outsourced then they have to come back to Boeing to get fixed,” he said.
Concerns about a too cosy relationship between the regulators and the regulated have also surfaced. Consultant and former airline executive Robert Mann said the US Federal Aviation Authority’s (FAA) mandate changed under administrator Marion Blakey, appointed by president George W Bush in 2008 as Boeing was working on the Dreamliner. “Blakey saw the FAA as a ‘customer services organisation’,” said Mann. The FAA was working with the airlines to cut regulation, not to impose it, he said.
Fukushima nuke plant operator admits blame
The operator of a Japanese nuclear power plant that blew up after the 2011 tsunami has admitted its lack of a safety culture and bad habits were behind the world's worst nuclear incident in 25 years. The operator, Tokyo Electric Power Co (Tepco), said it accepted the findings of a parliamentary inquiry into the Fukushima nuclear disaster that accused the company of collusion with industry regulators.
The earthquake on 11 March 2011 generated a tsunami that smashed into the nuclear plant on Japan's north-east coast and triggered equipment failures that led to meltdowns and the release of large amounts of radiation into the air and sea.
Takefumi Anegawa, the head of Tepco's company reform taskforce, said the December 2012 report by a parliamentary committee contained “so many descriptions about the lack of a safety culture and our bad habits.” He told a news conference in Tokyo at the Foreign Correspondents Club of Japan: “We admit, we completely admit, that part of the parliamentary report” where the committee found the disaster was preventable and the result of “collusion” between the company and regulators.
Work rules
Whether it is hazards in your workplace, horsemeat in your beefburger or Legionnaires’ in your neighbourhood, it is becoming evident that stringent regulation is not a burden, it is a necessity. Hazards editor Rory O’Neill looks at the costly consequences of rubbing out the rules.
Contents
| • | Introduction |
| • | The economy's tanking |
| • | High risk deception |
| • | Table 1: HSE inspections |
| • | Table 2: regulatory activity |
| • | Policy on the hoof |
| • | Disastrous business |
Related stories
| • | The economy may be tanking…But regulation is not to blame |
| • | Worker deaths don’t count |
| • | Boeing hurt by poor oversight |
| • | Fukushima admits blame |
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