2 nd Biennial National Safety Conference, 2013 The Economic benefits of Health, Safety and Environmental Management Systems within organisations. SIMON.

2nd Biennial National Safety Conference, 2013

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.


HSEMS ELEMENTS

HSEMS ELEMENT ADDRESSINGLeadership and commitment Top-down commitment and company culture,

essential to the success of the system.

Policy and strategic objectives Company intentions, principles of action and aspirations with respect to health, safety and environment.

Organisation, resources and documentation Organisation of people, resources and documentation for sound HSE performance.

Evaluation and risk management Identification and evaluation of HSE risks, for activities, products and services, and development of risk reduction measures.

Planning Planning the conduct of work activities, including planning for changes and emergency response.

Implementation and monitoring Performance and monitoring of activities, and how corrective action is to be taken when necessary

Auditing and reviewing Periodic assessments of system performance, effectiveness and fundamental suitability.


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


Absenteeism

Step 1: Estimate the total number of Absent days in your organisation for the past 12 monthsTotal number of employees 100Absent rate per employee per year (in days) 5

ORTotal number of absent days in the last 12 months 500

Step 2: Estimate the average hours worked per day and the hourly wageAverage hours worked per day 8Average hourly wage (GHS) GHS 3.125

Step 3: Determine the annual cost of staff AbsenceTotal annual cost absenteeism GHS 12,500.00

Step 4: Estimate the impact of a workplace health, safety and environmental programIt is estimated that a successful workplace health, safety and environment program can decrease staff absenteeism by an average of 30-40%. 1

Reduction in absenteeism 30%Total annual savings in absenteeism achievable by implementing an effective workplace health, safety and environmental system GHS 3,375.00

1 Price Waterhouse Coopers 2008, Building the case for wellness, United Kingdom.

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.


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

2 nd Biennial National Safety Conference, 2013 The Economic benefits of Health, Safety and Environmental Management Systems within organisations. SIMON.

Documents

safety limited

costs of poor workplace

safe workplace

healthy workplace

hse management system

environmental risk

incidence of workplace

hse incident