NOHSAC : Occupational Health and Safety in New Zealand : Tech Report 7

3.5 The compliance and enforcement system

The relationship between voluntary compliance and the role of the compliance and enforcement agencies | The functions of the inspectorate | The Department of Labour | Maritime New Zealand | Civil Aviation Authority | The Commercial Vehicle Investigation Unit | The Ministry of Health | Collaboration between the compliance and enforcement system and the rehabilitation and compensation system | Stakeholder comment | Comments and conclusions

Section 3.5 describes the compliance and enforcement mechanisms used to operate the health and safety system. This covers four steps:

Imposition of duties to ensure that people are not harmed as a result of work.
Setting of requirements that relate to the taking of all practicable steps to ensure health and safety, and that are flexible to cover different circumstances.
Provision of information to stakeholders on how to comply with the duties outlined in the HSE and HSNO Acts.
Corrective and enforcement actions to ensure that workplaces comply with the relevant legislative provisions.

This section focuses on the actions taken by stakeholders with duties relating to the provision of steps two to four. Organisations discussed in this section are:

the Department of Labour (the lead agency for health and safety compliance and enforcement)
Maritime New Zealand
the Civil Aviation Authority
the Commercial Vehicles Investigation Unit
the Ministry of Health
territorial authorities.

Stakeholders raised a number of concerns about the compliance and enforcement system, and these are identified in section 3.5.10.

3.5.1 The relationship between voluntary compliance and the role of the compliance and enforcement agencies

The compliance and enforcement system operating under both the HSE and HSNO Acts runs on a voluntary compliance basis. This means that employers and other duty holders have responsibility to identify what needs to be done in a specific workplace in order to comply with the Acts (eg, to take all practicable steps to ensure the safety of people in the workplace in the case of the HSE Act). Following identification, these stakeholders have a responsibility to ensure that activities are undertaken and that the results of these meet the requirements of the Act.

The compliance and enforcement agencies become involved in this system by providing information that assists duty holders under the Acts to comply, and by applying corrective measures and enforcement functions in situations when the Acts are breached.

While the “One Act, One Authority” principle underpins both the HSE and the HSNO Acts, the operation of the compliance and enforcement system is complicated in reality by the number of organisations involved and the role that each of them plays.

3.5.2 The functions of the inspectorate

Inspectorate activities and related functions given under the HSE Act include:

informing and educating employers, employees and others to improve health and safety at places of work
inspecting places of work and auditing health and safety management systems to ensure the Acts are complied with
requiring improvements to be made in cases of non-compliance
prohibiting the use of activities likely to cause serious harm
investigating accidents, incidents and complaints at places of work
prosecuting offenders in cases of serious non-compliance.

Inspectorate functions under the HSNO Act cover a similar range of functions, including providing advice and information on the provisions of this Act, and promoting and monitoring compliance with its provisions.

3.5.3 The Department of Labour

The Department of Labour is the lead agency for delivering New Zealand’s compliance and enforcement system for workplace health and safety. Fulfilment of this compliance role has two key components: education and information provision, and enforcement. (The inspectorate services operated by the CAA and Maritime New Zealand are similarly constituted).

3.5.3.1 The role of the Department of Labour

The Department of Labour’s Professional and Specialist Services Group is responsible for delivering information at the front-line and for ensuring compliance with the HSE Act across all sectors, industries and types of work that are not otherwise covered by designated agencies. It is also required to enforce the HSNO Act in any place of work. The Department of Labour gives effect to its compliance and enforcement duties under the HSE and HSNO Acts through the operation of a dedicated regional inspectorate workforce and through the maintenance of centralised technical and specialist staff, including Departmental medical practitioners. Members of the inspectorate also play a role in disseminating information about good practice to employers during routine audit and investigation. Appointed inspectors and Departmental medical practitioners have specific functions and powers under the Act.^xli The capacity of this workforce is discussed in section 3.10.

The newly established Information and Promotion Group of the Department’s Workplace Group will provide information on workplaces, including information on health and safety practices. (Previously this was provided by the OSH Service.)

Policy capacity is provided through the Workplace Policy Team.

3.5.3.2 Service delivery: Workplace Group Professional and Specialist Services

Current model of service delivery

The current service delivery model has a devolved structure: regional offices provide inspectorate services, with specialist technical support supplied from a central office.

The regional inspectorate offices cover 13 areas across New Zealand and employ a number of inspectors warranted under the HSE and HSNO Acts to undertake functions under those Acts. Different combinations of warranted inspectors are employed in each region (eg, the Nelson-Marlborough region employs general warranted health and safety inspectors as well as providing limited FTE coverage in forestry and HSNO; a much wider range of inspectorate services is provided for in the Canterbury-West Coast office).

The regional inspectorate can contact the Professional and Specialist Services Group at the head office for technical advice on compliance and enforcement with the HSE and HSNO Acts, and for technical advice across a limited range of subject areas (eg, agriculture, health, construction, mining and machinery).

Restructuring

The Department of Labour initiated a restructuring exercise in 2003/04. The outcome of this restructure has resulted in the merger of the five business units into a combined Department of Labour service. As part of this process, the former OSH Service has been disestablished as an “independent” business unit and merged into the newly-formed Workplace Group, which provides policy and service delivery functions for workplace health and safety, employment relations and ACC.

Work is continuing in this area. For example, the Department is currently consulting on the restructure of the Professional and Specialist Services Group (ie, the old OSH Service inspectorate and head office services and the services provided by the Employment Relations Act inspectorate). The purpose of this restructuring is to provide an outcome-based and customer-focused service.¹⁶ Areas for performance improvement include ensuring that a more cohesive and collaborative service framework is provided to a range of workplaces that might interact with the Department of Labour when meeting the obligations of the HSE Act and other pieces of legislation administered by the Department (such as the Employment Relations Act).

The Department of Labour outlines the following proposals for the future direction of occupational health service delivery:

Establishment of four regions: Northern, Waikato/Eastern, Central, and Southern (eg, merging current regional offices into larger area offices).
Creation of new roles (including a strong management structure, workplace co-ordinators to manage the HSE and ERA case-work coming into the office, generic workplace practice leaders to provide coaching to staff, and two chief advisors in occupational health and workplace relationships).
Development of regional teams to deliver services (eg, health and safety inspectorate services, employment standards, and mediation and workplace delivered from one unit).
Integration of business processes across the Group.

In addition, the establishment of a team within the Department of Labour that is dedicated to working with ACC has been mooted as part of the wider restructuring.¹⁷ This is discussed further in section 3.9.

Final decisions about the new structure were due in March 2006 but were not available to the project team at the time of completing this report.

Relationships with other agencies

The Department of Labour has a number of Memoranda of Understanding with other organisations. These Memoranda clarify the relationships between the Department and other agencies in respect of the operation of the compliance and enforcement system, and this system and the compensation and rehabilitation system.

Memoranda have been concluded with:

CAA, Maritime New Zealand and CVIU (which sets out relationships in respect of the administration of the HSE and HSNO Acts)
ACC (to govern the relationship between the Department of Labour and ACC)
Land Transport New Zealand (to ensure clarity around the administration of the HSE Act in respect of railways)
the Ministry of Defence (which outlines specific requirements for the Department’s inspectorate in terms of inspection of Defence workplaces)
the Ministry of Health (which clarifies the interface between legislation administered by the Department of Labour and legislation administered by the Ministry).

3.5.3.3 Funding received by the Department of Labour

The Department of Labour receives approximately $37 million with which to deliver compliance and enforcement services across New Zealand. A breakdown of the funding is provided in section 3.4.1.

3.5.4 Maritime New Zealand

Maritime New Zealand is the Crown entity responsible for ensuring maritime safety and security, marine protection and other functions to achieve a safe, responsive and sustainable transport system.

3.5.4.1 Functions and service delivery

Maritime New Zealand’s general functions are set out in the Maritime Transport Act 1994. A number of these functions require the services of a dedicated inspectorate to ensure safety at sea (such as investigating accidents, incidents and mishaps); however, specific provisions for workplace health and safety are not provided for in this Act. Rather, specific coverage is provided through the HSE Act’s definition of workplace.

The function of enforcing the HSE Act onboard ships has been delegated to Maritime New Zealand [Gazette notice 5 May 2003 (issue 44) refers]. The operational detail of this administrative delegation is provided for in a Memorandum of Understanding and operational agreement between Maritime New Zealand and the Department of Labour. These documents set out information sharing arrangements, require certain information provision between the agencies and provide for a clarification in enforcement functions.

Maritime New Zealand performs the HSE functions through its district office inspectorates, which are sited at key ports around New Zealand. Members of the inspectorate undertake health and safety activities as part of their other duties. Joint HSE Act training for the Maritime New Zealand inspectorate is provided at the Department of Labour’s training unit.

Maritime New Zealand also has responsibility for enforcing the HSNO Act in respect of ships [section 97(f) refers].

3.5.4.2 Resourcing

Maritime New Zealand receives funding of approximately $400,000 per annum to provide enforcement services in respect of the HSE Act. A baseline review of Maritime New Zealand’s funding was due for completion in December 2005 but the results of this review were not available to the project team.

3.5.5 Civil Aviation Authority

The CAA is a Crown entity responsible for ensuring safety and security in the civil aviation sector.

3.5.5.1 Functions and service delivery

The CAA’s general functions are set out in the Civil Aviation Act 1990. A number of these functions require the services of a dedicated inspectorate to ensure safety (such as investigating accidents and incidents); however, specific provisions for workplace health and safety are not provided for in this Act. Rather, specific coverage is provided through the HSE Act’s definition of workplace.

The function of enforcing the HSE Act on operating aircraft has been delegated to the CAA [Gazette notice 5 May 2003 (issue 44) refers]. The Department of Labour administers the HSE Act at all other points in the aviation sector. The operational detail of this delegation is set out in a Memorandum of Understanding and operational agreement between the CAA and the Department of Labour. This provides for the sharing of information and expertise, conducting inspections and audits, responding to events and undertaking enforcement.

The CAA has a dedicated health and safety unit based at its national office. Two FTE engaged by the CAA administer the HSE Act for the whole civil aviation sector.

The CAA also has responsibility for enforcing the HSNO Act in respect of any aircraft or aerodrome [section 97(e) refers]. The CAA advised that it is currently negotiating the provision of inspection services in this respect with a range of agencies.

3.5.5.2 Resourcing

The CAA receives Crown funding of $440,000 per annum to provide enforcement services in respect of the HSE Act.

3.5.6 The Commercial Vehicle Investigation Unit

The CVIU is a unit of the New Zealand Police. It is responsible for enforcing, investigating and preventing accidents in relation to New Zealand’s commercial vehicle industry. It is required to enforce the provisions of the HSNO Act in respect of the commercial vehicle fleet. The CVIU also investigates accidents involving commercial vehicles.

A Memorandum of Understanding exists between the Department of Labour and the CVIU. This provides for the appointment of Police employees as health and safety inspectors under the HSE Act, the sharing of information and expertise, the development of guidance material, conducting inspections and audits, response to events and undertaking enforcement.

3.5.7 The Ministry of Health

The Ministry of Health is responsible for administering a range of regulations made under the now-revoked legislation (section 3.2.5 of this document refers) and for some HSNO Act obligations in respect of protecting the public health. The Ministry of Health also has responsibility for enforcing the Smokefree Environments Act in all venues. The responsibility for enforcing these provisions falls largely to designated health protection officers employed at public health units.

Some areas covered in regulations administered by the Ministry of Health can impact on health and safety in workplaces. A Memorandum of Understanding exists between the Ministry of Health and the Department of Labour to ensure that there is collaboration and co-ordination at the interface between these areas.

3.5.8 Collaboration between the compliance and enforcement system and the rehabilitation and compensation system

The Memorandum of Understanding and the operational agreement that provides for the relationship between the Department of Labour and ACC effectively sets the parameters for formal collaboration between the compliance and enforcement system and the rehabilitation and compensation system. This is discussed in section 3.9.

3.5.9 Stakeholder comment

Comments did not canvas the performance of individual employees in any of the agencies discussed in this section. Any performance related comments included in this section relate only to organisational performance.

Comments focused on:

compliance costs^xlii
resourcing of the Department of Labour^xliii
restructuring of the Department of Labour^xliv
designation boundaries
implementation of performance-based legislation: the need for detail
compatibility of the education and enforcement role
performance.

3.5.9.1 Compliance costs

Several stakeholders noted that it is more difficult for small employers to comply with some of the performance-based requirements provided for in the legislative framework because they do not have in-house expertise or access to affordable external health and safety expertise. They therefore have to pay a higher cost per unit to comply with the legislation than do larger organisations.

No comments were made by stakeholders regarding compliance costs and the HSNO framework.

3.5.9.2 Resourcing of the Department of Labour

Stakeholders commented on the capacity and resourcing of the Department of Labour’s health and safety inspectorate: a key concern was the perception that the Professional and Specialist Services Group is not adequately resourced to provide for the enforcement of the HSE and HSNO Acts. Comments covered capacity, technical expertise and level of financial resource. The project team were provided with a number of examples of instances where occupational health and safety capacity was being provided by agencies other than the Department because the Department did not have sufficient technical and financial resource to address the situation. Stakeholders generally did not differentiate between the services provided by the inspectorate at a regional level and the services provided by the Department’s head office team.

Several government stakeholders raised resourcing concerns in relation to the enforcement of the HSNO Act (eg, that resourcing is too low for the level of enforcement required and for what is expected).

3.5.9.3 Restructuring of the Department of Labour

The loss of the “OSH Service” brand through the recent restructuring of the Department of Labour was raised as a concern by stakeholders as it was perceived to be a further erosion of the occupational health and safety profile. Several of these stakeholders noted that the actual effect on the prevention of workplace injury and disease or the future capacity of the Professional and Specialist Services Group cannot be quantified at this stage but noted that it would be interesting to see what happened in the future.

3.5.9.4 Designation boundaries

A small number of comments were made by government agencies regarding the need to clarify jurisdiction issues around the designation of duties under the HSE Act and the HSNO Act (eg, the relative responsibilities of Maritime New Zealand and the Department of Labour in respect of stevedores, or the breadth of enforcement work required under the HSNO Act in respect of aerodromes). Most noted that workable arrangements were in place for addressing these issues or that the issues were currently under discussion.

Comments made about the leadership of the compliance and enforcement system are discussed in section 3.9 of this report.

3.5.9.5 Implementation of a performance-based approach

Another key issue raised was that the implementation of the HSE and HSNO Acts requires people to have sufficient levels of information to enable them to comply with the controls provided for in the Acts.^xlv Stakeholders were concerned that the current levels of information available through ACOP, industry codes of practice, standards and other guidance material are inadequate to ensure a high level of compliance with best practice. Other stakeholders noted that amending key documents such as ACOP could be a very bureaucratic and time-consuming process.

3.5.9.6 Compatibility of the education and enforcement role

All categories of stakeholder identified a lack of clarity between the Department of Labour’s educative and information-providing role on one hand, and the Department’s enforcement functions on the other. Much of this comment focused on the interface between the education role played by the ACC and the education function undertaken by the Department of Labour when undertaking compliance activities (eg, the provision of information to assist compliance). This issue is explored further in section 3.9 of this report.

3.5.9.7 Performance

One stakeholder noted that there is a tendency for flurries of activity to occur following an incident of serious harm but that overall enforcement is weak. Given the lack of specific examples, however, it is difficult for the project team to comment further on this issue.

3.5.10 Comments and conclusions

The compliance and enforcement system operationalises the legislative framework provided for through the HSE and HSNO Acts. Although a “One Act One Authority” framework underpins this system, its operation requires collaboration and co-operation between a range of organisations. These relationships are governed by a series of Memoranda of Understanding and operational agreements between the Department of Labour and other agencies that provide oversight of certain workplaces.

Most of the comments made by stakeholders focused on the Department of Labour as the lead agency for the compliance and enforcement system. As such, discussion in this section also takes a similar focus.

3.5.10.1 Implementing a performance-based legislative framework

One of the biggest issues associated with the compliance and enforcement framework is the implementation of a performance-based approach. This is a very different framework to that previously provided, and considerable attention must be paid to ensuring that all duty holders understand what such a system requires of them. In order to support duty holders to develop an appropriate understanding of the requirements of the performance-based system, a range of more prescriptive “acceptable means of compliance” material is required. It is a concern that stakeholders considered only limited material to be available or in preparation. For example, anecdotal evidence suggests that approximately one FTE is necessary to review one ACOP to a satisfactory level within an appropriate timeframe. However, there appears to be limited technical resource in the Department of Labour to support the development of ACOP in specific areas (section 3.10 refers).

Anecdotal evidence also suggests that the Department of Labour has made a decision to not develop ACOP in the future and to rely instead on Departmental guidance material and industry-based codes of practice. This action is consistent with a recommendation made by the Ministerial Panel on Business Compliance Costs.¹⁸ Yet it is also important that the Department of Labour be involved in this process through its role as the lead agency for health and safety. As such documents are intended to assist workplaces to demonstrate compliance with the HSE Act, it appears that the Department of Labour may need to prioritise the review of existing ACOP more highly and also review its involvement in the development of other guidance material. This is recognised by the Department.¹⁷

3.5.10.2 Resourcing issues: the Department of Labour

It is questionable whether the overall total funding provided to the Department of Labour is sufficient to enable the range of enforcement actions necessary under the HSE and HSNO Acts. However, the project team understands that a strategic baseline review of funding is currently underway. The results of this review, expected in 2006, should further clarify this issue and may provide a way forward. General information about the funding of the Department of Labour for the provision of HSE and HSNO Act enforcement is discussed in section 3.4.1 of this report.

The technical resourcing of the Professional and Specialist Services Group, including information about the resourcing of health services, is covered in section 3.10 of this report.

3.5.10.3 Restructuring and roles

The Department’s Professional and Specialist Services Group is currently being restructured. At this stage, it is speculative to comment on the possible outcomes of this restructure, or the impacts that it might have on the future delivery of occupational health and safety services and/or on addressing some of the issues raised by stakeholders (ie, leadership, technical capacity and the provision of technical information to support compliance).

In saying this, the visibility of the health and safety services is significantly diminished within the new structure. While it is not possible to quantify the effect of the removal of the OSH Service brand at this stage, loss of OSH’s visibility may negatively impact on the profile of health and safety in New Zealand.

3.5.10.4 Compliance costs

Each piece of legislation confers costs on a range of stakeholders. There are the costs of compliance (eg, the red-tape costs) as well as the costs associated with meeting the requirements of the Act. For small businesses (such as the 63 percent of organisations that employ less than five people), the cost of meeting the requirement to take all practicable steps is likely to be more onerous than for larger businesses. This may cause significant problems for smaller organisations. However, the project team were provided with few indications of what the red-tape compliance costs involved. The annual Business New Zealand-KPMG compliance cost survey,²⁰ a survey to measure the level of compliance with legislation, found that compliance costs associated with the HSE Act rated third in a prioritised list of areas requiring action (below general taxation and employment relations). Interestingly, large employers (more than 50 FTE) recorded more concern with compliance costs than small employers (FTE<10).

The level of compliance cost associated with the HSE Act has also been the subject of a Ministerial Panel on Business Compliance Costs report. The panel made eleven recommendations in 2000.^xlvi Seven of these have been implemented but no information is available on the impact of these amendments in terms of compliance costs.

3.5.10.5 Organisational performance

The Business New Zealand-KPMG compliance cost survey commented on the helpfulness of certain agencies within the health and safety compliance and enforcement sector. The results of this survey indicated that stakeholders found the Department of Labour to provide useful information and to have an excellent website. Limited comment about the performance of the inspectorate was provided.

The HSE Act bestows no statutory function on any agencies to undertake monitoring and analysis at a national level. The project team notes that the Department of Labour no longer undertakes specific research or monitoring of occupational health in workplaces as was done by its predecessor, the Department of Health. Retainer contracts for poisons expertise, audiology, radiation testing and other scientific services (such as those previously provided by the DSIR) are no longer in place. While contracting for these services when required is consistent with the intention of the public administration and finance changes made in the 1990s, it appears that monitoring has been largely dropped from the services that the Department provides, in favour of education and enforcement activities. It is unclear from the evidence how much occupational health and environmental monitoring is picked up by other agencies, but the project team considers that this is likely to be limited.