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Background on Risk-Based Regulation

You have just been hired as General Manager at recently restored historical hotel located in The Rocks. The hotel has been providing very cheap, temporary accommodation since the early part of the last century. The hotel is located in the heart of Sydney but in a very dimly lit area where there has been a number of assaults and robberies. Last week, the rumour amongst the staff, was that one of the guests was badly assaulted and went to hospital. Also your guests have been allowed any number of visitors to their room without having to go through reception. Your mandate is to update the service and operations to suit tourists needs for 2013 and beyond.

In your first week on the job, you conduct a review of the premises, noting that the lift is old and is constantly out of order. The staff report to you that over the last month the lift has broken down at least 5 times, once there was an elderly guest in the lift and they suffered a stroke.

You also ask to see the written occupational health and safety plan. Hotel staff indicate there is no written plan, but they conduct a fire drill every summer for practice.

In addition you have also discovered the Health Safety Representatives have not completed HSR training and the Health Safety Committee is mainly made of full time staff from the administration area. The committee has not met for over three months and the minutes of the last meeting show the main topic for discussion was the staff Christmas party arrangements. Only two members of the committee have completed their committee training as the HR Manager said it was too expensive. When staff are injured they usually go to their local doctor as the first aid at TCR is not reliable – with kits not properly stocked and no effort made to roster qualified first aiders to each shift.

The Human Resource department has been so busy recruiting to replace the staff who keep leaving – they have fallen behind in conducting induction training. New staff are handed a staff hand book only. Staff are complaining of tiredness – and appear to be frustrated.

When conducting an audit you also discovered that there are no procedures at all for risk management. After reviewing the current sick reports for staff, you have discovered that an unusual number of housekeeping staff have been absent from work over the last month. Upon investigation you have found that the housekeeping department, which has 120 staff who are mostly casuals with a majority from Non English speaking backgrounds, have been using a new cleaning substance for the last six weeks that works well for glass shower screens. This has made the job easier for staff and has saved a great deal of time. Injuries and illnesses the staff have suffered include: Breathing difficulties when overcome by fumes for 8 staff Contact burns to hands for 4 staff Burns to the eyes for 2 staff. After talking to the staff you have discovered not all incidents with these chemicals have been reported. Even a guest has been overcome by fumes.

When you have been conducting your investigation you have not been able to find any information about the chemical. The bottles staff are using are not labelled and the supplier has supplied no information about the safe use of the chemical. Further the hotel also has an events/function area that can be hired by people not staying at the hotel. It is meant to hold up to 100 people in the dining area. You notice however that there is a booking next week for 150 guests and for 16 birthday party, with fireworks and a band. It is unclear as to the training your staff have been provided with regarding the service of food and alcohol

Your report needs to:

1. Identify the breaches in WHS legislation, with specific reference to the legislation that applies in the case study i.e. NSW legislation

2. Identify the hazards within the workplace

3. Assess the risks associated with the hazards and determine the priority for risk treatment

4. Identify appropriate management level controls to address non-compliance with legislation

5. Identify the risk controls applying the hierarchy of controls for the identified hazards

6. Conduct a cost benefit analysis that clearly states the costs and benefits associated with the non-compliance, hazards and recommended controls.

7. Describe the consequences of not improving compliance and managing the workplace hazards.

Appendices as a minimum need to include:

1. Risk assessments of the workplace hazards identified

2. Action plan for implementation of recommendations NOTES:

1. Words used in any tables or diagrams are not included in the word count

2. Words in appendices will not be included in the word count. A marking rubric can be found within the Assessment Area on your portal page. Got to the Assessment in question and click on the submission area for the assessment. Here you can click on View Rubric within the Assignment Information section.

Background on Risk-Based Regulation

Risk-based strategies have increasingly gained in popularity in a number of countries. They are promoted as leading to greater efficiency in the management of resources and to increased quality and rationality in regulation (Braithwaite et al., 2007). These risk-based approaches, consist of a wide array of implementation and enforcement activities, thereby taking the form of risk-based regulation. They involve different players, both private and public (Braithwaite et al., 2007; Döhler & Wegrich, 2010). With the emergence of risk-based strategies we are also witnessing the rise of the ‘regulatory state’, a new institutional and policy style, in which the government interferes with social processes and corrects market failures so as to control and minimise adverse consequences to health (Hood et al., 2001).

In its idealised form, risk-based regulation provides an evidence-based means of managing the use of resources and it prioritises action towards the highest risks in a transparent, systematic and defensible approach (Black & Baldwin, 2010). In this regard, the international ‘better regulation movement’ seeks to establish an efficient use of resources to generate enhanced regulatory performance, which recognises the complexity of modern risks and challenges thereby producing ‘better’ regulation (Döhler & Wegrich, 2010). The OECD, for example, claims that a risk-based approach “can help to ensure that regulatory approaches are efficient, effective and account for risk/risk trade-offs across policy objectives (…) [It] can improve the welfare of citizens by providing better protection, more efficient government services and reduced costs for business” (OECD, 2010, p. 11).

In the UK, all those involved in regulatory affairs are required to develop and use risk-based frameworks across all policy domains (Black & Baldwin, 2010). The UK is not the only country to incorporate risk-based approaches. In other countries, such as the US, Australia, Canada, and the Netherlands, risk has also turned into a central concept for organising regulatory endeavours (Hutter, 2002).

The seemingly universal interest in ‘rational’ risk-based approaches suggests that there may be a convergence in the way governance problems are dealt with in different national contexts. Effectively, efforts are increasingly made on the international level with the aim of creating risk-based frameworks in order to govern harms of a cross-boundary nature (Rothstein et al., 2011). Activities by organisations such as the EU and the OECD are cases in point (Hutter, 2006). It appears as if these efforts are built on the assumption that risk-based regulation offers a set of common concepts, tools and approaches which can be readily applied within different national regulatory institutions. However, ideas can often travel more easily than the content of regulatory instruments and having the same idea does not necessarily mean that convergence will occur (Radaelli, 2005).

Significance of Risk-Based Regulation in different countries

Poles apart from risk being a universal form of governance, the interpretation of, the understandings of, and the reactions to risk are shaped by institutional rules, contexts, tools and cultures (Rothstein et al., 2011). The divergence in the adoption and implementation of riskbased ideas represents the starting point of this study. Even though a broad range of studies focus on risk-based regulation in the UK (Power, 1997; Hood et al., 2001; Rothstein, 2004; Bartle, 2008), little research has been done on how risk-based strategies are implemented in other European countries. Hence, there is a lack of evidence which could underline the assumption that there exists variation in the adoption of risk-based strategies across different countries.

This study attempts to make a step towards filling this gap by focusing on risk-based regulation in Germany. More specifically, departing from the core characteristics of risk-based regulation, the study attempts to answer the following research question: to what extent does the occupational health and safety (OHS) regime in Germany adopt risk-based strategies?

In this context, it attempts to show that there exists a variation in risk-based regulation between different countries, which do not always apply the main characteristics of risk-based regulation uniformly. The study’s second objective is to investigate the factors which shape the uptake of risk-based arguments in Germany. Hence, it focuses on the way institutional structures shape regulatory components, thereby influencing risk-based thinking and activities. Special attention is given to how institutional norms?such expected standards of state behaviours, responsibilities and objectives?determine regulatory action.

The study opens with a literature review which outlines the theoretical framework (chapter 2). This is followed by a description of the methodology in chapter 3 and a portrayal of the structure of Germany’s occupational health and safety system in chapter 4. Chapter 4 also focuses on the management of carcinogenic substances as this holds a special position within the German OHS. This chapter also introduces the British Tolerability of Risk (ToR) framework, which serves as a point of comparison to Germany’s approach with regards to carcinogenic substances. Based on interviews with health and safety experts chapter 5 investigates the OHS regulation (chapter 5). Finally, in chapter 6 the findings will be linked back to the theoretical framework in order to answer the research questions.

2.1. Defining Risk and Risk-based Regulation In its most simple definition risk is understood as the probability of bad outcome (Jasanoff, 1993). Closely linked to the concept of ‘risk’, is the one of ‘hazard’, which is defined as an intrinsic property or condition that has the potential to cause harm or costs to human society (Hood & Jones, 1996).

Breaches in WHS Legislation

Yet, the two concepts are not mutually exclusive. As such the UK Health and Safety Executive (HSE) defines risk “as the chance that someone or something that is valued will be adversely affected in a stipulated way by the hazard” (HSE, 2001, p. 16). According to The Federal Institute of Occupational Health and Safety in Germany (Bundesagentur für Arbeitsschutz und Arbeitsmedizin, abbr. BAuA) (2010) risk represents the probability and the severity of a hazard to cause potential harm.

The two concepts are interlinked, especially in the field of European occupational health and safety. The European Framework Directive 89/391/EEC requires employers to undertake and document risk assessments of which the identification of hazards plays a crucial part. The way regulation is enacted, will strongly depend on which of these two concepts is adhered to. Hazard-based regulation, guided by a consideration of intrinsic hazard, does not utilise impact assessments or exposure assessments, which include considerations of the likelihood and extent of a hazard leading to harm (Nordlander et al., 2010; Löfstedt, 2011b).

Without such an assessment of actual risk, hazard-based regulation is accused of being precautionary as well as inhibiting activities which do not carry risk and may even be beneficial for society and individuals (Löfstedt, 2011a). Proponents of risk-based regulation claim that risk-based approaches are evidence-based and that they can help to better understand actual risks of harm. Unlike hazardbased approaches which only rely on the intrinsic property of an object or a substance to cause harm, proponents of risk-based regulation argue that risk-approaches go a step further by including assessments of likelihood (Nordlander et al., 2010). As such a risk-based approach entails the use of technical risk-based tools and.

it is based on three core aspects: science-based assessments and quantifications (‘objective’ risk calculations); cost-benefit analyses (expressing probable damage by monetary units); and probability theory to reduce uncertainty, calculating the probability that adverse events occur over a given period of time (like quantitative risk assessments (QRA), which calculate the magnitude of potential harmful effects and the probability of their occurrence) (Hutter, 2005; Renn; 1998).

The three main elements of risk-based approaches are very contentious and are at the origin of major debates within the governance field of risk regulation. The debates reflect competing world-views (Hood & Jones, 1996) and indicate that there is no universal adoption of risk-based approaches.

2.2. Risk-based Regulation: A Matter of Different Worldviews? Central to contemporary reflections on governance is the question as to what principles should govern the identification, measurement and regulation of risk (Hood et Jones, 1996). The normative rationale for risk-based approaches rests on the idea that by setting priorities and directing efforts to the highest risk, governance performance can be improved and resources used more efficiently (Klinke & Renn, 2002; Black & Baldwin, 2010). The desired result of riskbased governance is not to reduce all risks to zero, but to minimise them to an acceptable by using risk management and cost-benefit analysis (Klinke & Renn, 2002). By designing risk reduction policies according to the severity of potential harm, one avoids what Breyer (1993) refers to as ‘tunnel vision’ (overregulation of small/trivial risks, often more harmful than useful), random agenda selection (driven by personal interest rather than by rational appraisal), and inconsistency of measures across government.

Hazards within the Workplace

Risk tools have become attractive for regulatory agencies and governments in their efforts to manage societal risks and to respond to potential criticism on the legitimacy of their actions (Hutter, 2005). The potential for criticism and the increased public scrutiny have led to greater accountability and transparency (Rothstein et al., 2011). Increased transparency and accountability reveal the limitations of regulation. Certain degrees of regulatory failure become acceptable because risk-based regulation is based on probabilities (not on certainties), thus offering a justification in case of undesired outcomes (Rothstein et al., 2006). Yet, increased public scrutiny can augment the potential for blame and can consequently lead to so-called blame-games (Hood, 2002). In their attempt to shun blame, individual regulators or organisations may resort to ‘defensive risk management’, which put emphasis on blame avoidance, often to the detriment of attending to societal risks. What becomes evident from the above accounts is that risk emerges as an organising principle for decision-making and strongly influences regulatory activity (Rothstein et al., 2006).

Nevertheless, despite the universal appeal of risk-based approaches, the adoption of risk-based logics is institutionally shaped and varies not only between countries but even within regimes. The European Union, for instance, does not present a united front with regards to risk regulation; in some areas it is risk-based whereas in others it adopts a more hazard-based, precautionary approach (Vogel, 2001; Nordlander et al., 2010). In some countries risk considerations are confined to only a few policy domains. It even occurs that a same regulatory regime encompasses different regulatory logics: for example, risk-based application may be used to gather evidence, but policy-making and rule enforcement may follow different rationales (Hood et al., 2001; Rothstein et al., 2011).

If we accept that institutions shape behaviour through the ‘logic of appropriateness’, whereby members of an institution act in conformity to the norm of that institution, then they equally shape the world views of the ones working within them (March & Olsen, 1984; Peter, 2005). These worldviews are reflected in current debates about the principles of risk-based regulation, namely cost-benefit analysis, the scientific assessments and representing risks as probabilities, which are also referred to as technical risk tools.

Trying to assess the risk through scientific assessments is undertaken by most countries, and the quarrels usually do not arise over differences in methodology, measurements or dose-response functions, but over how to interpret the data and over whether or not to quantify it (Klinke & Renn, 2002). QRA, which calculates the magnitude of a potential loss of a harmful event and the probability of its occurrence, is celebrated by its proponents as the backbone of rational risk management. Opponents question the rationality and objectivity of such quantifications. They are sceptical of claims that one can quantify risks with high degrees of certainty and criticise such statements for creating a false sense of security. Quantifications are based on simplistic models and the inherent uncertainty makes it almost impossible to quantify risk (Hood & Jones, 1996). They contend that such quantifications are influenced by value judgements of experts and are at best only subjective approximations of reality, often different to actual experiences/outcomes (Cohen, 1996; Jasanoff, 1993).

Appropriate Management Level Controls

The primary aim of this research consists of finding out to what extent the German occupational health and safety regime follows a risk-based approach. The second aim is to explore how riskbased arguments or practices are used within this regime and how institutional factors may shape them. In order to understand how underlying processes shape the uptake of risk-based approaches and thinking in Germany’s health and safety regime, a qualitative methodology was chosen (Mayoux, 2005).

Thus, data collection took the form of semi-structured interviews, which were selected for flexibility and the ability to generate deeper meanings and raise issues which may not have been anticipated by the researcher (Longhurst, 2003; Valentine, 1997). The participants for this study were chosen according to their involvement and expertise in German health and safety. The researcher made contact with the participants via email and invited them to participate in the study. However, as it was difficult gain access to appropriate participants, a snowballing technique was adopted. This technique refers to using one contact who suggests another contact, who in turn can recommend a further contact. Such an approach has the advantage of overcoming obstacles, such as a high refusal rate. It also helps the researcher capture interviewees with particular fields of expertise and backgrounds (Valentine, 1997)

3.2. Weaknesses and Potential Biases of the Methodology A common criticism of qualitatively based research is that it is not representative or generalizable (Cloke et al., 2004). In this study this criticism is compounded by the relatively short sample size of interviewees. It would have been beneficial to have had conducted more interviews, as this would have allowed for a more in-depth understanding of people’s opinions on risk-based regulation and how such opinions are reflected in practice.

Yet, interviews are time consuming with regards to preparation, transcription and analysis. The numbers of interviews were thus restricted to what could be realised in the assigned time frame. Some shortcomings in the methods and techniques employed can be identified. Even though the snowballing technique overcame the obstacle of gaining access to potential respondents, the technique involves a drawback.

The aim of qualitative research methods is to hear different accounts, meanings and perceptions so as to understand and find commonalities in these differing ‘subjectivities’ (Mayoux, 2005). However, the snowball technique risks leading to the recruitment of informants from a very narrow circle, due to people’s propensity to put the researcher into contact with like-minded people (Cloke et al., 2004). It is possible that this has led to a certain bias in responses. The researcher tried to mitigate this issue by using several initial contact points (Valentine, 1997) and by trying to reach people without using the snowball approach. Sarah Haunert (1151941

Risk Controls using the Hierarchy of Controls

CHAPTER 4 – Occupational Health and Safety in Germany This chapter provides an overview of how the German occupational health and safety regime is organised and structured. The OHS regime reflects a typical German administrative style, including a complex mix of European legislation, federal legislation and enforcement activities carried out by the Länder. The overview is followed by an account of how general areas of OHS are regulated. Chapter 4 closes with an account of how hazardous substances and in particular carcinogenic substances are regulated. The ‘Risk Concept’ (Risikokonzept) which is used to guide decision-making on carcinogenic substances in Germany will be juxtaposed to the ‘Tolerability of Risk’ framework (ToR) of the Health and Safety Executive in the UK so as to provide a means of comparison and highlight major differences in risk-based regulation and thinking.

 Dualism The German occupational health and safety system rests on an essential principal, namely dualism. The dualism refers to the two pillars of the system: the statutory occupational accident insurance and the state-run system described above.

The statutory insurance for OHS (in German Unfallversicherungsträger or Berufsgenossenschaften) consists of insurance providers for industry, providers for agriculture and providers for the public sector (BAuA, 2005). All firms and public sector organisations are required to be member of one of these Berufsgenossenschaften.

This is to assure that all employees are covered by insurance in the event of an occupational accident or occupational disease. As such statutory insurance is part of the social law (Sozialrecht) and it is regulated by the Social Code VII (Sozialesgesetzbuch VII). Due to its functions statutory insurance is considered to form part of OHS legislation and is often referred to as autonomous OHS legislation (autonomes Arbeitsschutzrecht).

It has the authority to issue accident prevention regulations which require the approval of the Federal Ministry in consultation with the competent authorities of the Länder. Next to providing rehabilitation and compensation, prevention efforts also form part of the responsibility of statutory insurance organisations (Larisch, 2009). The Berufsgenossenschaften, in a similar way as the inspectorates of the Länder, provide consultative services to the insured and monitor businesses for compliance (see Figure 1).

 To What Extent is Germany Risk-based? 6.1.1. Hazard-based v. Risk-based Regulation The findings reveal that there is a general disinclination in the German occupational health and safety regime to undertake cost-benefit analyses and calculate risk probabilities. However, as outlined in chapter 2, risk-based approaches start with assessing hazards to then determine the likelihood of adverse events and their impact by applying probability calculations and CBA (Nordlander et al., 2010; Hutter, 2005; Renn 1998). Germany quantifies risks only with regards to the Risk Concept, but with a perceived reluctance and more as the result of a measure of last resort. Without resorting to CBA and QRA the approach in Germany then mostly focuses on hazards. The EU Directive requires that risk assessments are carried out in workplaces. Yet, Germany translated risk assessment into Gefährdungsbeurteilung, which necessarily puts the emphasis on Gefährdungen or hazards. Even though risk evaluations form part of the Gefährdungsbeurteilung, according to a respondent (R1), they play only a subordinated role.

Cost-Benefit Analysis

Conclusion

This study set out to analyse whether arguments about the universality of risk and risk-based regulation hold. Focusing on Germany’s occupational health and safety regime it demonstrates that risk in governance does not follow a universal pattern, but that risk ideas are used and conceptualised in different ways due to certain institutional influences. Whereas risk-based regulation has asserted itself in the UK, pervading almost every regulatory domain (Black & Baldwin, 2010), Germany is not marked by such an all-encompassing endorsement of risk-based regulation. Germany’s normative foundation, which is strongly anchored in the principles enshrined in its constitution, strongly influences the uptake of riskbased arguments.

The focus on individual dignity and physical integrity as well as the duty of protection conflict with conceptualisations of risk which contain uncertainties and probable damage. Whereas the UK’s utilitarian features facilitate or even demand the adoption of riskbased regulation, Germany’s essentially process-based focus is incompatible with outcome-based risk tools such as CBA and QRA. Even though scientific assessments are undertaken, for example to determine occupational exposure limits, cost-benefit analysis and probability calculations are uncommon if not unacceptable.

The trade-offs they include would violate the principles of the constitution. Nevertheless, trade-offs are done, albeit in a more indirect fashion. In the consensual tradition of decision-making trade-offs are reflected in adopted compromises, yet they are not as explicit as in strictly risk-based approaches. The Risk Concept relies on a partial conceptualisation of risk, namely on scientific assessments and risk quantifications. Yet, this concept represents an exception and was adopted as there were no better alternatives to managing risks from exposure to carcinogenic substances and the aim of the concept is to eventually lead to acceptable exposure levels for all substances, thus ensuring that the state complies with its duty of protection.

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