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Although all stakeholder groups have a part to play in the dynamics of health
and safety risks, the stakeholder groups considered below are of particular note.
Employees and their representatives include the trade union movement
who are the most vocal supporters for increased legislation to enforce health
and safety standards and one of the main instigators of legal actions against
Part C “ Overview of the Social Aspects of Business Risks

Financial institutions are improving their knowledge of the risks and lia-
bilities with regards to these issues and there will be more engagement from the
financial community as soon as they are confident with their methods of com-
paring performance. They are, therefore, one of the most vocal supporters in
their calls for more transparency and reporting. Some local authority pension
funds have started to target certain sectors where there are high levels of health
and safety risk, such as the construction sector.
Governmental organisations are using their market power to alter the
behaviour of companies, and they have included a company™s health and safety
track record as one of the criteria for Private Finance Initiative (PFI) tenders.
The government have used the health and safety track record of suppliers as a
ground for terminating contracts, such as the rail maintenance issue.
There are also moves to strengthen legislation in this area with the
Corporate Killing Act, proposed in Frank Doran MP™s 10-minute rule Bill which
was put before Parliament on 30 March 2004. However, despite a six-year com-
mitment to this Bill, Parliament have so far refused to set a date for its enact-
ment which would then make corporate killing an offence. Cathy Jamieson, the
Justice Minister, has said that the Scottish Executive is committed to bringing
forward laws to deal with corporate killing (Risks, issue number 146, 6 March
2004). An interesting international development, which would worry UK busi-
nesses if adopted in the UK, is the US™s plan for a ˜three strikes and you™re out™
punishment for corporate crime. The proposed bill would cover illegal finan-
cial dealings, consumer and environmental protection, civil rights, union rights
and employment laws, and it passed its first hurdle at the start of March 2003
(Risks, issue number 105, 10 March 2003).
International governmental organisations (IGOs) are becoming increas-
ingly important in this sphere of UK life as in many others. An example is the
European Union Directive 2002/95/EC on the restriction of the use of certain
hazardous substances in electrical and electronic equipment. From July 2006,
new electrical and electronic equipment (EEE) put on the market may not con-
tain lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls
(PBB) or polybrominated diphenyl ethers (PBDE).

Risk management best practice
The legal duties of employers in managing health and safety include drawing
up a policy statement, developing policies and procedures, implementing these
policies and procedures to provide safe systems of work, reviewing progress
and reporting on health and safety. The following are the main risk mitigation

Implementation of management systems: companies that have an occupa-
tional safety and health management system (OSH-MS) set up according to
the International Labour Organisation Guidelines (ILO-OSH 2001) have both
better safety and productivity records;
Chapter 16 “ Health and safety in the workplace 377

Involvement of workers in planning and running the organisation™s OSH-MS;
A functioning, recording, notification and indicator system in order to gain a
better picture of the problems and allow follow-up;
Development of a modern labour inspection system: strengthening it qualita-
tively and quantitatively;
Measurable targets for reducing occupational accidents and work-related
diseases by targeting their causal factors (say a 20% reduction in the fatal acci-
dent rate within the next five years as measured by reliable records).
A national profile or an inventory of the present safety and health state is a
starting point;
Gradual extension of the coverage of protective measures, compensation in case
of injuries and occupational health services to workers not yet covered; and
Workplace mapping techniques are an effective tool to identify health and
safety problems in the workplace and the measures necessary to resolve
them. Body maps, hazard maps and ˜world maps™ can make sense of prob-
lems at work, and can assist in identifying and remedying health and safety
problems in the workplace.

As an example of what can be achieved, an official report by the UK™s Health
and Safety Commission™s (HSC) ˜Measuring up ¦ Performance Report 2006™
estimates that over 5000 lives have been saved since the introduction of the
1974 Health and Safety at Work Act. However, most of the action on health and
safety must be at a local level, but much of the framework should be global, this
includes issues such as:

Profiling the tasks of staff and risk assessments;
Development, promotion and supervision of International Labour Standards
Development of Inspection Systems;
Development and promotion of codes of practice and other instruments; and
Technical cooperation.

Health and safety management systems
The financial benefits of an OSH-MS have been strongly argued, as most studies
have seen a positive benefit to an organisation. The company should develop a
greater awareness of its legal liabilities for the health of its staff, as well as their
safety. In doing so:

It will help keep ahead of legislation and regulators; and
There will be improved stakeholder relations, as staff, the community and
customer relationships all improve.

The International Labour Organisation™s Guidelines on Occupational Safety
and Health Management Systems (ILO-OSH 2001) were the result of extended
international consultations held over the course of 2000“01. BS 8800 (British
Standard) provides guidelines for an effective occupational health system.
Part C “ Overview of the Social Aspects of Business Risks

The OHSAS 18000 Series of International Standards for Occupational
Health and Safety Management Systems is a relatively new international sys-
tem published in 1999. OHSAS 18001 corresponds to the British Standard BS
8800 and is also designed to be similar in structure and to complement ISO
14001, the Environmental Management System, and ISO 9001, the Quality stan-
dard. The primary difference is the ˜risk assessment™ section (which replaces
the environmental aspects section of ISO 14001). The specifications require
businesses to demonstrate that their systems for managing health and safety
proactively seek to eliminate or minimise risks to employees that they comply
with all national and international legal requirements and continuously strive
to improve their performance in the areas of health and safety.

Reporting the benefits of management systems to
There are numerous, although presently unquantified, benefits from communi-
cating with stakeholders effectively. Business partners and suppliers (business
to business (B2B) and business to customer (B2C)), customers, employees,
financiers and governmental organisations all want to hear that the organisation™s
health and safety risks are understood and effectively managed.
There is an increasing level of guidelines and reporting frameworks for
organisations to become immersed in. The main guidelines include the Turnbull
Code, the Corporate Governance Combined Code and the replacements for the
Operating and Financial Review (OFR). The Global Reporting Initiative (GRI)
template for reporting on health and safety performance (see www.globalre-
porting.com) can prove a useful framework.

Health and safety risk
An overview of company risk
The total health and safety risk exposure of the 500 largest EU and US compa-
nies is 4.1% of their value, due to impacts like new legislative direct fines for
non-compliance and new regulatory requirements for equipment. The average
exposure net health and safety risk is 3.8% of market capitalisation for all
health and safety risk of which 1.2% is related to internal issues (this chapter)
and 2.6% is due to external factors and historic liabilities (in Chapter 17). This
has been reduced from 6.7% of market value by good risk management tech-
niques (the risk reduction/management factor).

Categories of health and safety risk
The chart below shows the total environmental risk broken down by category.
Chapter 16 “ Health and safety in the workplace 379

FTSE 350 AVERAGE Net (residual) risk profile

Detailed analysis of the risk by category

Health and safety risk Gross (inherent) Net (residual) Covered
risk risk in

Health internal (workforce) 1.6% 0.7% Chapter 16
Safety internal (workforce) 1.1% 0.5% Chapter 16
Health external (public) 0.6% 0.4% Chapter 17
Safety external (public) 1.6% 1.0% Chapter 17
Health “ historic liabilities 1.9% 1.2% Chapter 17
Total 6.8% 3.8%

The scale of the issue for the UK can be seen by this breakdown of the causes of
work-related fatalities. The estimated 300 deaths per year in the UK are only
likely to be 5.4% of the total work-related fatalities in the UK, and the largest
killing is likely to replicate the figures for the entire established economies at
55% of all deaths. It is also useful to note that the countries which have strong
legislative frameworks to prevent accidents only represent 5.4% of fatalities,
whereas countries without such an established culture form a much larger pro-
portion of the world™s total fatalities (18%). Regulation would appear to have a
strong influence upon reducing the levels of serious workplace incidents as a
recent UK enforcement drive has led to a fall of 7% on the previous year to
28 605 in 2005/06, compared to 30 451 in 2004/05 (UK Health and Safety
The table below (see www.ilo.org/public/english/protection/safework/
accidis/index.htm) shows the global estimates of fatalities caused by work-related
diseases and occupational accidents in 2002, the most recent year of full data.
Part C “ Overview of the Social Aspects of Business Risks

World total of work-related fatalities for Work-related % of % of world
established market economies (EME) mortality, lower limit EME total total

Communicable diseases 11 176 4 17
Cancer (malignant neoplasms) 164 581 55 32
Respiratory system diseases 16 716 5.5 8
Circulatory system diseases 76 595 26 23
Mental (neuro-psychiatric conditions) 7572 2.5 1
Digestive system diseases 2892 1 1
Diseases of the genitourinary system 1833 0.6 0.4
Accidents and violence 16 170 5.4 18
Total 297 535 100 100

The health and safety priorities are viewed as management of the risks associ-
ated with the following:
Chemical substances, carcinogens, asbestos;
Stress, overload and pace of work, psychological factors, poor workplace
relations and management;
Communication of information on hazards;
Ergonomics, repetitive work and musculoskeletal problems;
Organisational and safety and health (quality) management issues;
Preventive occupational health services, health promotion; and
Unforeseen impacts from new technologies.

Health and safety risk overview by sector
These risks can be viewed in a sector-by-sector format and the graph below
maps out the sectors with the highest net risk from issues. It indicates the com-
bined risk profile for all health and safety risks in this chapter and Chapter 17
combining both internal and external risks.

Analysis of internal health risks of the workforce
Research indicates that:
Internal health risk is 0.7% of the market value of the 500 largest EU and US
companies; and
This risk exposure has been reduced from 1.5% of market value by good risk
management techniques (the risk reduction/management factor).
This category concerns working conditions that have caused an employee to
develop an illness or long-term health condition, including all chronic ill-
nesses, stress, repetitive strain injury, lung disease resulting from operation (i.e.
mining dust, engineering solvents, etc.).
Even in Sweden almost a quarter of employees (24%) had suffered from a
health problem caused by their work in the preceding year. The 16th Swedish
Chapter 16 “ Health and safety in the workplace 381

Health & Safety Combined

Net (Residual) Risk



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