Unit NG1: Management of health and safety
Unit NGC 2: Risk Assessment
Appendices

Morals and money

Moral expectations of good standards of health and safety

Society exerts pressure through three overlapping and interacting spheres of influence: moral, legal and financial. This section outlines the moral and financial drivers for health and safety management. The legal framework for health and safety regulation is discussed in later elements.

Imagine you are a Health & Safety Manager at a company performing poorly in health & safety. You are trying to persuade a company director to take health and safety more seriously. What moral arguments could you make, i.e., what could you say to the director to change their way of thinking about this?

Remember, when it comes to moral arguments, you’re basically trying to make someone see the difference between right and wrong.

Give it a shot and don’t worry if it seems difficult. You’ll be able to see some suggestions once you’ve had a go.

The financial cost of incidents

Accidents clearly cost money because of injured people, damaged plant and machinery and wasted product. The HSE estimates that occupational injuries and illnesses cost the UK in the region of £20 to £30 billion pounds each year if the total costs to individuals, employers and society are considered. The costs of highly visible accidents involving large scale loss of life or major property damage as a result of fire and explosion are often determined by official inquiries.

The BP Texas City fire and explosion in 2005 cost over $21million in fines, $2billion in civil claims, and $1billion in reinstating the site. The Buncefield oil refinery fire in 2005 is believed to be the most expensive accident in UK history with a total cost of over £1billion, including £9.5 million in fines.

Smaller accidents have proved much more difficult to cost as relatively few companies have systems in place to quantify them.

HSE Guidance from 2002 “Reduce Risks – Cut Costs” (INDG355) identified three methods for quickly and crudely estimating uninsured costs of accidents.

  1. the uninsured costs of an accident are approximately 10x the insurance premiums paid
  2. Uninsured losses from accidents in smaller firms add up to £315 per employee per year
  3. The average uninsured cost of an accident causing absence from work is approximately £2100

As every business and every incident are different the only accurate way of determining costs is to measure them.

An enforcement or competent authority may decide to prosecute for a breach of relevant safety and health law and, if successful, a fine and/or imprisonment may be given. Where companies or organisations are found guilty of serious management failures, penalties can include unlimited fines.

In England and Wales penalties were recently changed and offences that are tried in a magistrates’ court now carry an unlimited fine or imprisonment up to six months. For serious matters that go to a Crown Court and are triedbefore a judge and jury, the individual can be handed either an unlimited fine, up to two years’ imprisonment, or both. Fines of over £100,000 are not uncommon and you can’t get insurance to cover criminal penalties.

Insured and uninsured costs

Further costs include those associated with replacement labour, accident investigation time, downtime, and increases in worker insurance premiums because of poor claims history.

If the accident has caused an injury, the injured worker may also be able to bring a personal injury claim for their injuries. Damages are awarded on a range of factors, including the loss of a faculty (such as sight or hearing), whether the injury is permanent, and its effect on the claimant’s ability to earn a living.

Accident and ill-health costs can be likened to an iceberg: costs that you can recover from insurance are visible. Those not covered by insurance are hidden below the water and are many times greater.

Following a serious and well publicised accident, you have been newly recruited as a Health and Safety Advisor at a bakery organisation…

Read the full scenario here.

Some of the exercises we include in the course ask you to write your answers to questions. There are a few of them in this section – how did you get on with them?

If you found them challenging – that’s a normal reaction! Many learners find it challenging to put their ideas down on paper (or type them into the box).

But the thing is – that’s what the NEBOSH Open Book Exam is all about, so you’ll need to practise this skill if you want to do well!

Watch the video for an approach you might find helpful.