The Cost of Safety

Excerpt from Graham Dent’s Discussion on OHS Harmonisation Group on Linkedin – MORE HERE

The cost of safety in a competitive environment – how to create a level playing field?

One of the common concerns for business, particularly contractors, is that when they comply with OHS laws it can leave them at a competitive disadvantage against businesses who do not comply.
Increasingly companies retaining contractors are incorporating OHS requirements and evaluations, to varying degrees of zero to comprehensive. But too many compliant businesses see contracts being awarded to competitors they know are taking shortcuts.
SINGAPORE is considering a law to assist in redressing this by making the cost of OHS more transparent. Its not perfect, but I am curious as to what those in this group who are involved in:
(a) tendering for work; or
(b) calling for tenders
think of it.
Amongst other matters some obvious issues would include:
– a common methodology for assessing / calculating the costs; and
– verification.
But it would facilitate highlighting issues and disproportionate operational versus OHS costs etc – anyway – for your consideration here is the story:
from ASIA ONE – Dec 1, 2011
Contractors could be required to specify safety costs in their tender price to developers, if a preliminary recommendation made by the Workplace Safety and Health (WSH) Council is adopted.
Currently, it is understood that some contractors do not state safety costs in their tender price to help secure bids.
This might give them an advantage if developers favour a lower tender price.
Contractors whom my paper spoke to applauded the recommendation, as it could help level the playing field.
Said Mr Chua Chian Hong, director of small and medium- sized enterprise (SME) Megastone Holdings: “If everybody includes the work-safety and health costs, the situation would be less unfair. Some contractors choose not to include them in their tender price to get (the project).”
The recommendation was based on the findings of a 10-month study, commissioned by the WSH Council’s Construction and Landscape Committee, which involved more than 1,000 contractors, foreign workers and other stakeholders.
These results were presented to about 600 industry practitioners during a half-day conference at the Suntec Convention Centre yesterday.
The study found that, even as all SMEs “agreed that safety makes good business sense”, they are often squeezed by costs and tight construction schedules.
Mr Louis Lim, chairman of Lim Kim Hai Electric Company, said that, in addressing safety issues, construction costs could be raised by 2-3 per cent in multi-million-dollar projects.
But he added: “The higher cost is inevitable. If contractors do not include (the safety costs), they will just be short-changing the construction. They might even incur greater costs if the Ministry of Manpower stops construction work (when accidents happen).”
The greater costs are usually borne by all parties, including consumers, who have to contend with higher selling prices, said Mr Lim.
Therefore, by ensuring that safety measures are taken at the worksite, the chances of any unnecessary loss of life would be reduced, and prices for consumers may also be lower, he said.

Do you have any thoughts? Please share them below