Companies of all sizes and complexity question the need for the level of legislation imposed on them from Europe and domestic government. With many organisations struggling in the current economic conditions, some may question the benefit to investing in legal compliance.
Organisations with certified management systems, such as ISO 14001, ISO 55001 and OHSAS 18001 could probably recite verbatim the clauses of the standards that require them to identify and comply with the legislation that applies to their operations.
But beyond management system standards, are there other reasons for investing in legal compliance?
All organisations have legal obligations
- Only some organisations choose or need to have a certified management system, but all need to meet the laws which apply to them.
- Failure to comply can be costly in terms of fines, reputation, or personal cost when there is an injury or fatality.
- In the case of public sector organisations, we would expect the authorities that enforce the regulations to actively and effectively manage their own compliance. If authorities fail to meet the obligations that they themselves enforce, they are at risk of being viewed as hypocritical, or worse still, incompetent.
What are the consequences of non-compliance?
Looking specifically at health and safety prosecutions, between November and December 2012, the HSE published details of 41 successful prosecutions related to contravention of HSE regulations. Of the 41 prosecutions, 27 cases involved actual injury to workers, and 3 were brought following the death of a worker.
The majority of prosecutions involved private enterprises operating in the UK. However, the Environment Agency, three councils, and one company operating from Ireland were successfully taken to court for contravening the Health and Safety etc. at Work Act.
- The Environment Agency was ordered to pay more than £220k in fines and costs after one of its employees drowned while dredging an icy watercourse in Cambridgeshire.
- Bury Metropolitan Borough Council was ordered to pay over £27.5k in fines and costs after one its employees suffered an electric shock from a 230 volt mains cable.
- McHale Engineering Ltd of Co Mayo, Ireland was ordered to pay £113k in fines and costs following the death of a farmer in England who had been using their equipment.
- Carillion Construction Ltd, along with Febrey Ltd, were jointly prosecuted after a worker died following a fall from height at a Swansea building site. Carillion was ordered to pay £182,500 in fines and costs.
Many of these prosecutions could have been averted by adequate management controls, training, and effective communication. This would have been less costly than the personal cost to the workers involved or the financial penalties imposed on the organisations.
Actively identifying compliance issues and acting on the findings of investigations can prevent small problems from escalating. The financial and reputational cost of deliberately or accidentally falling foul of the law can be far greater than the cost involved in ensuring compliance in the first place.