The Journey to WHS Criminalisation | How the Risk Management profession has changed over the last 40 years

In this episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis discuss the journey to WHS (Work Health and Safety) criminalisation and the evolution of the risk management profession over the past few decades.  

Richard discusses his working history and experience watching the application of risk management change from the 1980s to 2010s from engineers to psychologists and culture, to the lawyers.

They highlight the increase in prosecutions in the last 18 months under WHS legislation, particularly targeting small and medium-sized organisations, and recent cases, such as the Dreamworld incident and the White Island explosion, with the introduction of criminal manslaughter provisions. 

Overall, Richard and Gaye emphasise the importance of considering all reasonable practical precautions to ensure safety in organisations, rather than solely relying on compliance audits. 

If you’d like further information on Richard and Gaye’s work as due diligence engineers, head to www.r2a.com.au.

Transcript

Megan (Producer) (00:01):

Hi, welcome to the latest episode of Risk! Engineers Talk Governance. In this episode, due diligence engineers, Richard Robinson and Gaye Francis talk about the journey to WHS criminalisation and more specifically, the journey of the risk management profession over the past few decades.

(00:25):

We hope you enjoy the episode. If you do, please give us a rating. Also, remember to subscribe on your favorite podcast platform, and if you have any feedback, please drop us a line. Enjoy the episode.

Gaye Francis (00:40):

Hi Richard, and welcome to another podcast session. How are you today?

Richard Robinson (00:44):

I'm well, Gaye. It's a very fine day. Pleasant temperature.

Gaye Francis (00:48):

Today we thought we'd talk about the journey to WHS criminalisation and the journey, I guess the risk management standards been on and, or, the risk management profession has been on in the last 30 years. And I guess this came out of, I gave a conference paper late last year, I think it was, and I was the only engineer amongst a whole lot of lawyers. And so we were sort of saying, how do you demonstrate due diligence in accordance with the WHS legislation? But there was a lot of lawyers talking about how to comply with the legislation. And it was interesting that the two different aspects of what the lawyers were saying as in a compliance check against the legislation compared to what we were saying, to keep things safe in your organisation -- this is the due diligence process that you need to go through. And one of the speakers was talking about that, and an observation from us is that there's been a lot more prosecutions under the WHS legislation, probably in the last 18 months to two years.

Richard Robinson (01:55):

Correct

Gaye Francis (01:55):

And that observation was quite confronting that we didn't expect that to happen because it hadn't happened in the past. And the observation was that they were mainly prosecuting small and medium sized organizations rather than large businesses.

Richard Robinson (02:10):

Well they were the successful prosecutions, at any rate.

Gaye Francis (02:13):

That's correct. And one of the lawyers was saying that there was still an observation that there was still quite a number of levels between the executive management in large organisations and what was happening on the ground or its site between those large organisations. So there was still a corporate veil protecting some of the larger organisations against the WHS criminal manslaughter...

Richard Robinson (02:42):

Criminal manslaughter.

Gaye Francis (02:42):

Criminal manslaughter provisions. But I think that's starting to change even in the last little while. That excuse that there is that power distance is no longer an excuse or a reason they won't be prosecuted against.

Richard Robinson (02:58):

Well, I mean, see from an engineering viewpoint, we've always had held the view, the objective is to stop things going wrong in the first place rather than just to stop yourself going to jail. We agree that's a worthwhile thing to do, but the objective is to prove, demonstrate to you're safe first in a way that satisfies your legal obligations, which has always been our proposition. Whereas the lawyers just sort of say, a lot of 'em say, let's just go and do a compliance audit.

Gaye Francis (03:21):

So it's a liability management exercise rather than an improved safety exercise.

Richard Robinson (03:26):

Correct. What was that line that somebody gave us? Remember they gave us a new acronym? I can't remember what it was now in LinkedIn channel, I think it was. Anyway.

(03:38):

Well, one of the consequences of all this that we're talking about, we're trying to reflect on the actual history of this whole risk management business and how we actually got to this thing. And one of the slides in our book I originally pitched from KPMG, basically from the 1990s I think it was, but they had sort of had an observation in the 1980s, in effect, the technologists, the engineers particularly hopped into this risk management business with enthusiasm. That's basically when I showed up. I mean, I was just commenting that one of the first papers I ever gave was "The rise, the future of risk engineering" with Derek Viner back in 1983. And the engineers had seized on this with great enthusiasm. I remember <inaudible> of advanced engineering from Sydney Uni was big on it too. I dunno if you remember then. No, you wouldn't actually.

Gaye Francis (04:17):

No, it's before my time, Richard. I can say.

Richard Robinson (04:20):

Anyway, the engineers were big on this in the 80s and in fact, that's how I got into it and how I sort of got into the business in the first place. And the risk management standards started in that time, which was based on the insurance downside risk management. But then the commercial people turned up in the 90s and said "No, no, no. Well, you technological people. Technological risk is a subset of business commercial risk. And we believe an upside downside risk, not just managing downside. We talk about optimising upside as well. And so all your technological people, you're a subset of business risk" which is what the message KPMG was basically promoting.

Gaye Francis (05:00):

So you could have rewards and you could have opportunities as well as downside risk.

Richard Robinson (05:05):

They're still talking about it now. If you manage your own super fund, they still talk about risks and opportunities, all these financial people.

(05:12):

Anyway, what then happened, which have kind of amused me, was that the psychologists then turned up in the 2000s, said "No, no, no, all you commercial people, this is all a matter of risk culture". I know the APRA review of the National Australia Bank foreign currency trading scandals said that the risk management standards were seen as 'trip wires to be avoided rather than genuine attempts at risk control' and all that sort of thing. And so the aviation psychologist particularly appeared and said "No, no, no". And a number of the regulators turned into aviation. Aviation psychologists became the regulator, different industries. And it was the psychologists.

(05:46):

And then that's what sort of happened next was that it's almost as though the lawyers felt 'we're missing out on this, we've got to get back into this', or something like that, because obviously the 2004 OHS Act came into Victoria, but the WHS legislation commences at the start of the 2010s and number of jurisdictions actually put criminality in for recklessness, knew or made or let it happen. That means you had to be a known problem, which for some reason you failed to manage. And Queensland put that in and a number of others. Anyway, that decade sort of moseyed on and then, particularly, we had the Dreamworld incident where the raft flips and the four young people got killed. And when they tried to prosecute in Queensland the managing director and the chairman, it seems that they didn't know anything about it, the issue. Even though the organisation knew. And so they could have done something about it.

Gaye Francis (06:40):

In the background was that the rafts had actually flipped during a maintenance cycle when they were empty, so they knew when the water levels were low that these rafts could flip. So as an organisation, as you said, they did know about it. But did the chairman and the managing director know?

Richard Robinson (06:57):

Clearly the organisation was negligent and they wanted to press that negligence onto the senior decision makers and they couldn't do it because recklessness said you'd have to have shown that they knew beyond reasonable doubt that the hazard existed. And I doubt that they did. And so the Boland review kicked in and they basically chucked in criminal manslaughter, knew or ought to have known, which has been busily flying around the place since about 2018. And Victoria, for example, adopted in 2020. So you can see in that sense that there's been a sudden rise in

Gaye Francis (07:26):

Prosecutions and

Richard Robinson (07:28):

Well, the legislative framework's been put in place to facilitate it. So what competent regulator wouldn't say: Well, they've gone and given us all the tools, doesn't that mean we're supposed to? And it just sort of roll onto the White Island explosion where they started us by prosecuting 13 parties. You were telling me that (latest information) had popped out somewhere.

Gaye Francis (07:48):

Yeah. They've dropped the charges against the three individuals, but the organisation has been found guilty as a management organisation and sentencing's now not due till sort of early next year, 2024.

Richard Robinson (08:00):

But if you look at the journey like that, you're going from the technologists to the commercial people to this aviation psychologists and culture to the lawyers, sort of reinserting, criminal manslaughter in there. And you sort of wonder why in the 2020s that there's a sudden burst of prosecutions... Probably seems like a reasonable possibility view if you just look at that from a helicopter view of the secrets of events.

Gaye Francis (08:22):

I think we've always had a problem though, Richard, when you set back to it and you say: Hold on, we're trying to make our organisations safer and the tasks that we do safer for the individuals that do it. By breaking 'em up into all of those little silos again, you've got this different insight and I don't know that risk should be separated out as a separate function. It's almost should be business as usual and thought about in all of those different ways. And I do get that they give you different insights. But if you take, and we use the word SFAIRP, and I think we're moving away from using the word SFAIRP because that is creating a language confusion again. Whereas the intent is to make sure that all reasonable practical precautions are in place.

Richard Robinson (09:07):

With the emphasis on ALL. I think that's where some of the lawyers are getting a bit confused out there. You have to demonstrate that all reasonable practical precautions place is not just a matter of reasonable practicability, it's all of them. And if you adopt a process which can miss one that was reasonable and that could have worked and it's identified after the event, that's problematic.

(09:32):

That's the other point I wanted to make goodness just escape me again, which is irritating. But anyway, that's what happens when you get a bit older.

Gaye Francis (09:39):

So I think none of these things are wrong. There is a different focus and there's definitely a liability management exercise; a lot of liability management exercises going on at the moment. But as we said, to make your organisation safe, you've got to consider all of the reasonable practicable precautions that can be put in place. And that requires a whole lot of different processes, not just a compliance audit against the legislation.

Richard Robinson (10:06):

I suppose what I think has puzzled me a bit is that I remember, I think we made this observation before, when we were doing some work for what was in the Office of Gas Safety. We sort of worked out there's two types of regulators, those who think that the number of successful prosecutions are a measure of success. And those who think that the number of successful prosecutions are measure of their failure. We've noticed abrupt decline in the number of who think the successful prosecution are measure their failure. And I'm not quite sure whether that's because they basically said: Tried to do it, that's all too hard and prosecuting is just so much simpler. And it is easier at one level. You just sort of have a few prosecutions say, well, if you don't do it...

Gaye Francis (10:40):

It's black and white isn't it. Whereas you're not trying to help. I think another observation we're trying to, we have seen is, when the legislation first came out was, we thought there may be a lot more technical directors put on Boards who had an understanding of the organisations and the issues that they were exposed to. But that certainly doesn't appear to have been the case. There still seem to be mainly lawyers and accountants on there. And I wonder whether this new view or new move towards, or a recent move towards the liability management tool, that's where the lawyers come into being on Boards. But they still have to have an understanding now that it's knew or ought to have known. They still are required to have an understanding of what the issues that their organisation are exposed to.

Richard Robinson (11:31):

Well, I would've thought so, but we'll see what happens.

Gaye Francis (11:36):

So thank you for joining us today. It's a short and sweet one today, but we just thought that that was an interesting observation, the journey that the risk management subject I guess has gone through in the last 30, 40 years or so. And it'll be interesting to see where it goes next.

(11:55):

Thank you. Have a great day.

Richard Robinson (11:57):

Thanks, Gaye. Bye.