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.

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