The Economic benefits of Health, Safety and Environmental Management Systems within organisations.SIMON OPOKU-AMANKWAHHealth, Safety and Environmental Consultant(Model Health and Safety Limited, UK/GHANA)
What is a HSE Management System A comprehensive system that aims to reduce the Health, Safety and Environmental risk posed to workers and other affected parties by: • promoting safe working practices • creating a safe working environment • identifying clear lines of responsibility. A healthy and safe workplace can have significant benefits to both workers and business. A healthy workplace is good for business.
THE COSTS OF POOR WORKPLACE SAFETY The true costs of workplace injury, illness, and death are found in the impact on those individuals, families, and communities affected. The toll in grief, pain, and suffering remain immeasurable. According to ILO, around 160 million people suffer from occupational diseases and 2 million people die every year as a result of occupational accidents and work-related diseases and injuries. The annual cost of workplace accidents and diseases has been estimated as US$5 billion. How much is it in GHS?
GHANA’S CASE! • Your company’s money is part of this statistics! • The lack of data and under-reporting of accidents and major incidents in Ghana could mean that the percentage is even higher than the global figures. • Out of the estimated number of reported accidents in Ghana, the fatality rate stand at 20.6 % • Companies in Ghana experience roughly the same incidence of workplace injury and illness as companies in the developed economies. However this has a greater impact on Ghanaian businesses. Why? It is far more difficult for Ghanaian companies to recover from any HSE incident. The relative impact is greater due to the lack of cheaper lines of credit. Key workers cannot be easily or quickly replaced due to the limited skill-base. Short-term interruptions of business can lead to loss of clients and important contracts. A serious incident can lead to closure of a business due to the direct costs of dealing with the incident or the loss of contracts and/or customers.
DIRECT IMPACTS Loss of key staff resulting in low productivity Disruption to business activity Damage to product and/or equipment Increased workers compensation liability Fines, penalties, and legal liabilities Moral effect on other workers
INDIRECT IMPACTS Increased absenteeism Corporate image Loss of reputation in supply chain Decreased job satisfaction / morale
BUILDING THE BUSINESS CASE Dorman (2000) notes that to promote effective incentives to improve safety health and environment within organisations, the cost of injury and illness should be made ‘economic, internal, variable, and routinely visible’. What happened to BP’s share price after the recent environmental disaster?
SAFER COMPANIES OUTPERFORMS Leon Gettler October 31, 2007 - Research COMPANIES with good occupational health, safety and environmental systems outperform the market. Those with boards and management that monitored workplace HSE systems beat the index by 30.4 %, while those with workplace HSE systems outperformed it by 24.9 %. The research, undertaken by corporate governance watchdog Regnan and Goldman Sachs JBWere, found companies with workplace health and safety systems outperformed the benchmark by 38.4 per cent on the stock market. The findings were sent to Goldman Sachs JBWere, Its analysis also suggested that workplace HSE could be an effective proxy for screening underperforming stocks. http://www.regnan.com.au/
CALCULATING YOUR RETURN ON INVESTMENT ROI is a financial metric that companies use to figure out if spending money on a project (HSEMS) makes financial sense ROI = Net Benefits x 100 % Costs Positive ROI = GOOD Negative ROI = OPPOSITE
ROI EXAMPLEIn the last 12 months, a company of 100 staff has experienced an absence rate of 5 days per employee. The company runs a shift roster of 8-hour days and the average hourly wage is GHS 3.125. 1 Price Waterhouse Coopers 2008, Building the case for wellness, United Kingdom.
SYSTEMS Policy Procedures Arrangements Accidents and Incidents records Health background and surveillance Flexible Working Involve occupational health
MANAGEMENT AND THE IMPLEMENTATION CYCLE Management endorsement is absolutely critical for program development.
CONCLUSION Key messages for Companies Recognise the business advantages of good HSE practices Do a self-assessment and create an HSE action plan Excellence in safety is a journey, and starts with a first step Workplace HSE legislation applies to all workplaces, and must be complied with. Support is available Improvements in safety performance can result in business benefits