Thursday, 27 May 2021

Addressing Environmental Risks

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Addressing Environmental Risks

From an Occupational Health and Safety perspective

Exposure to environmental litigation is an issue that companies are increasingly expected to deliver on as awareness of climate change increases. Whether it is driven by legislative requirements, a need to economise on resources or considerable media coverage of the issue, it is clear that being kinder to our planet is becoming a board requirement.

“Failure to heed this clarion call has the potential to damage a company’s reputation overnight, can cause a loss of market share, incur non-compliance fines and tie a company and its directors up in litigation for any incidents, injury or death to persons,” warns Andy Mizen, Senior Risk Consultant at Aon South Africa. 

The South African Occupational Health and Safety Act (OHSA) 85 of 1993 is a key piece of legislation in this space. Occupational Health and Safety aspects highlighted include, but are not limited to:

  • The provision ofa safe workingenvironment.
  • Writing a health and safety policy.
  • Eliminating or mitigating anyhazard orpotentialhazard.
  • Employers taking all necessary measures forhealth andsafety.
  • Employers ensuring that non-employees arenot exposed tohazards.
  • Employees obeying the health and safety rules and procedures of their employer.
  • CEO assigningduties to personnelin writing.

“The emphasis of the act is the duty of care that an organisation has, to ensure the safety of employees as well as non-employees, which include contractors or members of the public. Main industry sectors and contractors that are most affected by environmental risk include petrochemical companies (oil), renewable energy producers (solar, wind), aquacultural farms, sewage plants, geothermal power, hydro power and nuclear power producers and even wildfire control. Organisations dealing with asbestos and polychlorinated biphenols (PCB) are also included,” says Mizen.

“Increasing legislation pertaining to environmental issues link OHSA to all these industries, making it crucial for organisations to be aware of the risk and to mitigate it. Following are a few examples of compliance failures that underscore the importance of having a robust health and safety policy in place, and more importantly, enforcing it,” says Mizen.

Case Study #1

A major international oil company was responsible for the largest marine spill ever, when five million barrels of oil landed up in the ocean, the equivalent of 780 000 m3, causing extensive environmental damage, 11 fatalities and multiple injuries.

Cost implications of the event led to a loss of market share. The company experienced a significant reduction in sales and it was banned from contracts. Legal proceedings initiated against the company included charges of manslaughter and obstruction of justice.

The direct cause of the spill was the oil company’s failure to monitor a contracting operator.

Case Study #2

The largest oil rig explosion to date, caused extensive environmental damage with 168 fatalities and multiple injuries. To complicate matters, evacuation routes proved to be unsafe and adjoining rigs kept pumping fuel which maintained pressure and exacerbated the entire situation.

The company was financially crippled in the aftermath of the disaster and its sales dropped. Legal proceedings initiated against the company revolved around unsafe rig design with gas lines that were installed next to the fire control room where the walls were not fireproof, which led to the automatic fire protection system not engaging. 

The direct cause of the oil rig explosion was a failure to monitor a permit to work on a critical gas pump, which led to the explosion.

Aon has drafted environmental risk control standards that include six steps to follow that are integral in identifying risks in this space and have environmental specialists on hand to assist in the implementation:

Once potential risks have been identified, various tools and processes can be implemented by an organisation to aid in keeping occupational health and safety top of mind. These include:

  • Standard Operating Procedures – That can be drafted with the aid of a seasoned brokerage in the field. It should form part of any and all training and instruction efforts undertaken. 
  • Induction Material – Standard operating procedures need to be included in a written format in induction material as proof of compliance.
  • Safety Meetings – These meetings need to be mandatory. An expert broker in the field should be able to provide material for inclusion in these meetings, such as toolbox talks, as proof of compliance.
  • Safety Posters – Need to be visible and strategically placed as reminders.
  • Safety Logbooks and Permits to Work – Helps an organisation to keep track of safety issues as well as ensuring that qualified individuals are on site and performing their duties according to expected standards.

Stop Work Authority

If something goes wrong or a potential risk is identified, staff members need to have the authority to stop all work, immediately, to avoid an incident. ‘Stop Work’ authority should be implemented in the following situations:

  • Unsafe conditions.
  • An incident occurs.
  • Any significant near-miss.
  • Emergency situation or alarm activation.
  • Any significant change in conditions or work plan.
  • Anytime someone feels that the environment, personnel or equipment is at risk, or procedures are not being applied correctly.

“More importantly, workers must not be penalised or victimised for reporting unsafe conditions, as it is counter-intuitive to the ethos of having a ‘Stop Work’ process in place,” says Mizen.

“Addressing your organisation’s environmental risk, and the interplay between occupational health and safety, is a task best undertaken with the expertise and insight of an experienced broker by your side, considering the gravity of potential incidents in this space. Having a well-rounded risk management and safety regime in place is crucial, as is the need to offset the risk from an insurance perspective, where required. Dealing with a brokerage that is able to navigate American, British as well as local markets and legislation is also critical,” Mizen concludes.

Published in Energy and Environment