Saturday, April 24, 2010

The Core of COR (Certificates of Recognition)

The Certificate of Recognition (COR)Program is a relatively new feature of some workers’ compensation / prevention systems. Designed primarily as an incentive for employers to implement and maintain a robust safety and health management system that meets a set of criteria established for the employer’s particular industry, these programs are generally voluntary, time-limited before having to ‘renew’, and involve external audits.

COR programs are offered by several jurisdictions in Canada but I can find little in the way of formal published research on the benefits and costs associated with COR. To complicate matters, there is no ‘standard’ for COR certifications (although some jurisdictions are recognizing CORs from other provinces).

A COR program is usually offered by the agency responsible for prevention and may carry benefits for the firm in terms of lower workers’ compensation premiums. In Alberta, COR is offered by Alberta Employment and Immigration. Firms must undergo an audit by a Certifying partner. Qualifying firms are expected to achieve a pass on every element in the audit and an overall score of 80% or better. The elements examined relate to the Health and Safety Management System.

The Yukon and Nova Scotia have introduced programs under the name COR. Many larger firms use COR as a pre-requisite for subcontractors and providers

In British Columbia, a COR program is offered by WorkSafeBC. Certifying Partners offer audits but the goal goes beyond meeting required OH&S primary prevention standards. The COR program in BC recognizes and rewards employers who go beyond the legal requirements of the Workers Compensation Act and the Occupational Health and Safety Regulation by taking a best practices approach to implementing health and safety management systems. Firms who also meet standards for return-to-work (RTW)/Disability Management programs can obtain an additional rebate. Achieving COR status for both area can net the employer a 15% rebate on premiums.

In WorkSafeBC’s case, the benefits to the employers who qualify for COR go beyond the rebate. Theoretically, these employers should have fewer defects in their safety programs, fewer violations of safe work procedures, and lower costs associated with work-related injuries. Workers in such firms theoretically benefit from safer workplaces, strong adherence to safe work procedures by co-workers and other persons in the workplace, and improved prospects for a safe and durable return to work. The COR certification may also give qualifying firms an advantage in competitive bid processes.

As I said, there is little in the way of formal peer-reviewed research on the benefits of any COR system currently in place. One administrative review was recently conducted by the Auditor General of Alberta. The AG found:

Half of those employers that persistently fail to comply with the OHS Act also continue to hold a valid Certificate of Recognition (COR), 4 and continue to have elevated injury rates among their workers. In short, although these employers do not comply with OHS orders, and their workers are much more likely to get injured on the job, these employers continue to receive Partners in Injury Reduction financial rebates and use their COR to bid on contracts with major companies in such industries as construction, and oil and gas.

As more COR programs are established and have had time to operate for several years, more independent formal research will tell us if these programs are yielding their planned benefits for workers and employers.

Monday, April 12, 2010

Does leadership really matter?

Does leadership really matter? I’ve always believed the commitment of an organization’s leadership to safety and health makes a difference. The more I look at the impact effective leadership has on safety and health in different organizations, the more certain I am of the answer to this question.

I think of leadership from a functional perspective. In this context, effective leadership is about achieving the leader’s desired outcomes through the actions of others because others share the leader’s vision. Autocratic, dictatorial leaders can and do achieve outcomes through others, but not because their followers share any common vision or commitment to the leader’s vision. Charismatic leaders can often achieve their desired results, too, but followers of such leaders tend to act out of loyalty or commitment to the charismatic leader rather than the ideal or outcome the leader desires.

Effective leadership in the health and safety context depends on something other than the charisma or dictates of the organizational leader. It depends on a real commitment—the understanding, internalization and action—of those at the top of the organization that is shared down to the operational front line. It depends on communication—the tangible and consistent message that safety and health priorities are the priorities of the leadership. It depends on vision—a clear articulation of the desired state.

I recently heard David Eherts- VP Chief Safety Officer Sikorsky Aircraft and Joe Grabinsky- Chief Union Environmental and Health Steward at Sikorsky speak about Sikorsky’s safety and health culture. Their corporate mission statement “We pioneer flight solutions that bring people home everywhere…every time” was put in context with their health and safety view. They described the culture on the shop floor as one where “we take care of each other”. They have “The Safety Dollar Program”, a safety and health reward program based on positive reinforcement and recognition for employees doing the right things when it comes to working safely and taking care of each other. The rewards are cash credits to items from a designated web store where the credits can be exchanged for safety-related items for the home, car, kids, and even pets. This culture has lead Sikorsky to reduce its lost time injury rate from 4.0 [per 100 FTEs] in 2004 to just 0.9 in 2010.

That talk was delivered at a two day event at Maersk North America’s President’s Safety Council meeting in Charlotte, NC. Maersk shares the view that safety and health culture is critically important to corporate success—including profitability. This was their ninth annual event that focuses Maersk leadership( the presidents of their group of companies, operational leaders, and some front line managers) on nothing but health, safety and the environment. In front of their chair, Russ Bruner, and their colleagues each president spoke of their operations’ progress and listened to presentations from others like Sikorsky on how to take their HSE performance to the next level. Maersk’s “Drive to Zero” campaign has seen their OSHA reportable injury rate fall from 9.53 [per 200,000 hours of employment] in 2003 to just 1.64 in 2009, and their time loss injury rate drop from 8.0 to 0.38 over the same time frame. It was amazing to see the commitment to safety from the top management to management at the shop floor level at Maersk. In that room, there was a palpable excitement about HSE and a sincere belief that attaining a zero reportable injury rate was both achievable and in the best interests of workers, shareholders and customers.

Firms like Sikorsky and Maersk demonstrate that leadership matters when it comes to health and safety. In Canada, a growing number of firms are putting health and safety at the top of their priority lists. The signatories to the CEO Health & Safety Leadership Charter are another group of employers who are giving life to these ideals.

“Leadership and learning are indispensable to each other” [from a speech John F. Kennedy was to deliver on the day he was assassinated]. If you know an organization that epitomizes safety and health leadership, share their success, post their story and help others to learn how leadership can make a difference.

Thursday, April 1, 2010

Raising OSHA Penalties

I was at a Health, Safety and Environment conference in North Carolina this week and some of the side discussions centered around what motivates employers to more complete compliance with OH&S regulations and standards. As I noted in my post February 4 post, some firms have a very strong safety culture but others –particularly those who should know better—factor the perceived cost of compliance against the perceived probability of non-compliance being detected times the estimated costs (dollars, reputation…) of the sanction. It appears DAVID MICHAELS, US Department of Labor Assistant Secretary for Occupational Safety and Health has been thinking about this, too.

In testimony before the US House of Representatives Subcommittee on Workforce Protections on March 16, 2010, Dr. Michaels supported legislation [the Protecting America’s Workers Act or PAWA] that would, among other things, significantly increase the cost of sanctions. He noted:

Safe jobs exist only when employers have adequate incentives to comply with OSHA’s requirements. Those incentives are affected, in turn, by both the magnitude and the likelihood of penalties. Swift, certain and meaningful penalties provide an important incentive to “do the right thing.” However, OSHA’s current penalties are not large enough to provide adequate incentives. Currently, serious violations — those that pose a substantial probability of death or serious physical harm to workers — are subject to a maximum civil penalty of only $7,000. Let me emphasize that — a violation that causes a “substantial probability of death — or serious physical harm” brings a maximum penalty of only $7,000. Willful and repeated violations carry a maximum penalty of only $70,000 and willful violations a minimum of $5,000.
Currently, the average OSHA penalty is only around $1,000. The median initial penalty proposed for all investigations in cases where a worker was killed conducted in FY 2007 was just $5,900.

He went on to compare these penalties with those in other areas and violations.

The current penalties do not provide an adequate deterrent. This is apparent when compared to penalties that other agencies are allowed to assess.For example, the Department of Agriculture is authorized to impose a fine of up to $130,000 on milk processors for willful violations of the Fluid Milk Promotion Act, which include refusal to pay fees and assessments to help advertise and research fluid milk products. The Federal Communications Commission can fine a TV or radio station up to $325,000 for indecent content. The Environmental Protection Agency can impose a penalty of $270,000 for violations of the Clean Air Act and a penalty of $1 million for attempting to tamper with a public water system. Yet, the maximum civil penalty OSHA may impose when a hard-working man or woman is killed on the job — even when the death is caused by a willful violation of an OSHA requirement — is $70,000.
In 2001 a tank full of sulphuric acid exploded at a Motiva refinery. A worker was killed and his body literally dissolved. The OSHA penalty was only $175,000. Yet, in the same incident, thousands of dead fish and crabs were discovered, allowing an EPA Clean Water Act violation amounting to $10 million — 50 times higher.

If you have a few minutes, you might want to review the full text of his testimony. I found the testimony compelling. It will be interesting to watch the development of the PAWA.