More regulation puts future safety at risk

HIDESIGHT

There is no doubt the government will make precisely the wrong policy choice in the wake of Pike River.

Governments always do. The cry will be “It must never happen again!” Legislation will be drafted and passed. Worthy speeches will be made. People will believe, finally, that something has been done. There will be much backslapping.

And then disaster will repeat. There is an inevitable cycle to failed policy. And ever-more regulation is a failed policy.

But ever-increasing regulation is hard-wired into the DNA of New Zealand politics. It’s not the default position in response to any problem, it’s the only position. The only debate is about how much and what type.

The Royal Commission is clear: Pike River Coal directors, management and, indeed, miners, put profit ahead of safety. And the regulator, the Department of Labour, didn’t do its job.

The evidence, analysis and conclusions are unassailable. The bare facts speak for themselves. The fault is the resulting policy prescription: it doesn’t fix the problem identified.

Ticking the boxes

The department failed to enforce existing regulations. More regulations won’t improve bureaucratic performance. It will make it worse.

More regulation makes it harder for a department to tick all the boxes. And businesses and civil servants become more and more preoccupied with form filling and box ticking than ensuring safe workplace culture.

Proper process and ticking the boxes become the substitute for actually ensuring safety, and correct procedure followed the sure-fire excuse should anything go wrong.

We then have the “profits before safety” problem. More and more regulation doesn’t alter that basic equation. Safety is a cost, a constraint, an add-on to the business of business, the making of profit. More regulation doesn’t change that dynamic.

Imagine this. Imagine managers and directors were personally liable for accidents. Not strictly liable. But liable for negligence. The dynamic would change overnight.

The business would have to seek insurance. It would need to do so before the business even started.

An insurance company would do a far better job than the failed Department of Labour, or any other department for that matter, in ensuring the business was safe.

Best safety practice would be built into the business to ensure profits. Its very success and survival would depend on it.

It would no longer be “profits before safety”. It would be “safety to ensure profit”. Risky mines, risky ventures, risky practices would never get off the ground. They wouldn’t get the insurance necessary to start.

The argument against tort for negligence is that it’s the ambulance at the bottom of the hill – and depends on lengthy and expensive legal process following an accident. That’s true. And it’s a big negative.

Rearranging deck chairs

But the big plus is not the result should there be an accident but the incentive on everyone to ensure there isn’t an accident to begin with.

The problem at Pike River was that no one – workers, managers, directors, departmental heads and staff – was incentivised to ensure a safe workplace and safe work practice.

Regulation was a cost. And enforcing them a pain. For everyone.

That’s what needs to change. And all the regulation in the world won’t produce that change.

The Royal Commission recommends a standalone Crown agency to take responsibility for health and safety. That’s rearranging the deck chairs. It doesn’t change the problematic dynamic that caused the disaster.

The commission concluded, “Oversight of health and safety planning should start early in the life cycle of a mining project”. That’s absolutely right.

But seriously, is making a government-approved Health and Safety plan a requirement to applying for a mining permit the proper way of doing that? I doubt it.

We are going to get a new bureaucracy, further legislation, more red tape but no extra safety. Bank on it. It’s in our DNA.