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You are here: Home / Due Diligence / Some Stuff on Risk and Safety Due Diligence

Some Stuff on Risk and Safety Due Diligence

June 4, 2016 by Admin 2 Comments

Some Stuff on Risk and Safety Due Diligence

Due DiligenceRecently, a client asked if I could come out to their site and “do a Due Diligence Audit”. I wasn’t exactly sure what that might entail or what they wanted it to achieve and after half an hour of discussion it didn’t seem like something they couldn’t easily articulate either, but, one of their major customers was coming next month to do one on them so they wanted to make sure all their ‘ducks were lined up’?  “Don’t you have a checklist or something?”, they asked.

‘Due Diligence’ seems to have become another risk and safety term which simply roles of the tongue (thankfully I haven’t yet heard it called DD!). Mention it and people will nod knowingly but do they really understand what it means and how to ‘do it’? Although recent legislation has created new criteria, the concept of Due Diligence is not that new. Here are some useful articles and resources that may help you to get your head around it:

Rob Sams writes in Focus on ‘Meeting’ people, not legislation – a path to risk maturity

‘Due Diligence’ seems a buzz term in health and safety in Australia at the moment. I’ve heard many refer to ‘due diligence’ and it’s six steps, as the answer to what we have long been searching in health and safety. Many believe that it provides the clarity and an objectivity that we need in order to ‘meet’ legislative requirements. But does it really, and further, what does a focus on ‘meeting’ legislation, mean when it comes to ‘meeting’ people?

Many of the requirements of ‘due diligence’ are subjective. For example, there is a strong emphasis on terms such as ‘appropriate’ and ‘reasonably practical’. For this reason, it is not possible to state categorically whether an organisation ‘meets’ it’s legislative requirements.

The term is enshrined in terminology and principle in OHS Legislation around the globe but the definitions provided by the Regulators create more questions than they answer. A couple of examples:

The Definition of Due Diligence in Australia by Safe Work Australia

Due diligence is the corporate governance responsibility of officers with respect to work health and safety. The due diligence obligation recognises that the behaviour and decisions of officers of a person conducting a business or undertaking (PCBU):

  1. determine whether the PCBU complies with its work health and safety duties, and
  2. strongly influence the health and safety culture of businesses and undertakings.

What is meant by due diligence in Canada – Canadian Centre for OHS

Due diligence is the level of judgement, care, prudence, determination, and activity that a person would reasonably be expected to do under particular circumstances.

Applied to occupational health and safety, due diligence means that employers shall take all reasonable precautions, under the particular circumstances, to prevent injuries or accidents in the workplace. This duty also applies to situations that are not addressed elsewhere in the occupational health and safety legislation. Reasonable precautions are also referred to as reasonable care. It refers to the care, caution, or action a reasonable person is expected to take under similar circumstances.

Another term used is employers must do what is “reasonably practicable”.  Reasonably practicable has been described by the Labour Program (Canada) as taking precautions that are not only possible, but that are also suitable or rational, given the particular situation.  Determining what should be done is usually done on a case by case basis.

To exercise due diligence, an employer must implement a plan to identify possible workplace hazards and carry out the appropriate corrective action to prevent accidents or injuries arising from these hazards.

Of more use to someone trying to figure out due diligence in the context of occupational safety and health, may be this short video by OHS Lawyer Greg Smith which has a few ideas. A short primer on due diligence. quote ”When it comes to paperwork, more is not always better”

 

Dr Long says in: Its Business As Usual in Safety

There is value in accounting and measuring but not all risk and safety is measureable. For example, have a look at what the WHS Act and Regulation says about Due Diligence. Due diligence is neither objective nor quantifiable. The Act itself endorses the subjective nature of due diligence. The most common and repeated adjective in the Act is ‘appropriate’. Here are sections c) and d) of the WHS ACT:

c) to ensure that the person conducting the business or undertaking has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking; and (d)  to ensure that the person conducting the business or undertaking has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information (Part 2. Division 2.4)

In his video “Due Diligence – 10 Precautions” (watch it below), Dr Rob Long explains the cultural nature of due diligence. The best way to tackle the demands of due diligence is to come at it from an understanding of culture and safety ownership. In this video Dr Long explains the Human Dymensions ‘Culture Cloud’ and the ‘Due Diligence Rainbow’. Using these two metaphors enables a more sophisticated understanding of due diligence rather than a mechanistic view that supposes that due diligence is about the accumulation of systems and paperwork.

Due Diligence from Human Dymensions on Vimeo.

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