Out-Law Analysis | 26 Mar 2018 | 4:34 pm | 3 min. read
Health and safety laws, standards and culture can be radically different in different countries around the world, posing a potential headache for manufacturers that operate in multiple jurisdictions.
Ensuring the safety of people and of products is particularly challenging in an interconnected world where the impact of operating with unsafe processes, or producing dangerous products and factoring in the cost and time involved in recalls, can be severe from both a commercial and regulatory perspective.
Applying a single set of health and safety standards globally is one option available to manufacturers to help them manage risk, but there are disadvantages to the approach.
At a basic level, there are two approaches available to manufacturers over how to best manage health and safety risks when they operate on worldwide basis.
The first option is to apply global standards across all of the business irrespective of local laws, and to set best practice standards that address risk at an overarching level rather than against specific legislative requirements. General rules for workers on machinery guarding or on exposure to hazardous substances, for example, could be applied.
An alternative to applying global standards is to create separate systems for different jurisdictions to reflect particular regulatory requirements and enforcement priorities of the regulatory agencies.
The advantage of this approach is that it is able to capture particular requirements and mitigate the risk of liability from a radically different approach. The disadvantage is that the approach is likely to be unwieldy, and there are issues of consistency regarding internal enforcement and policing of those requirements.
Manufacturers that elect to adopt the global standard approach will generally have reached the view that protecting against those risks is the right thing to do, even if in a particular jurisdiction there are not express requirements to do so.
Having a global set of standards can help create consistency and enable the recording and reporting of incidents internally to take place on a like for like basis across the whole business.
It also sends a clear message to everyone in the business on what the standards on health and safety are, and it further allows manufacturers to develop a single process for managing compliance with those standards.
In terms of the safety of products produced, a standardised approach can help manufacturers control the nature, quality and composition of the goods they make, and enhance their quality assurance programmes.
However, there are disadvantages to setting global standards on safe working procedures within a manufacturing facility or factory.
A global approach can be inflexible and may not be appropriate for local conditions. Manufacturers could also find it challenging to obtain buy-in to the standards across each of their businesses or in a particular jurisdiction if those standards conflict with existing accepted practices.
There is also a question over how compliance with the standards across the whole organisation would be monitored and reported. Would reporting only take place within the local business, for example? If so, how will the group establish whether its expectations are being met? Those issues would need to be addressed before the standards are set.
Adopting higher than necessary standards in some jurisdictions will also have cost implications.
Managing health and safety issues is an increasingly global task for major manufacturers. We have seen regulators in one jurisdiction consider how manufacturers have responded to health and safety incidents at sister plants in other jurisdictions when considering whether similar incidents within their scope of regulation could have been prevented. Manufacturers that fail to address failings with sufficient speed or rigour risk that fact being held against them in other jurisdictions as a result, with the potential of that leading to regulatory penalties, criminal prosecution and reputational damage.
Equally, if an incident occurs in a jurisdiction where standards are lower, the fact a manufacturer has complied with local laws will not prevent scrutiny and criticism where people were killed or injured in those cases.
Manufacturers must consider what their standards should be benchmarked against. A global standard could not account for the differing safety regimes in many countries, including the approach taken by regulators.
A good example of this concerns expectation on the way business units investigate incidents and respond to regulatory incidents and intervention. In this respect, dealing with the Occupational Safety and Health Administration (OSHA) in the US will be very different to dealing with the HSE in the UK. Issues of legal privilege can also vary greatly.
The best approach for manufacturers might be to apply global standards that can be tailored at a local level to meet specific requirements. Guidance on regulatory enforcement should always be jurisdiction specific in any case. Manufacturers should have a good audit programme in place to confirm suitability for each location.
Jon Cowlan is a specialist in health and safety law at Pinsent Masons, the law firm behind Out-Law.com. Pinsent Masons will be attending the Health and Safety exhibition and conference hosted by the British Safety Council on 10-12 April 2018 in Birmingham, where Sean Elson will be chairing a panel discussion on the challenges in modern manufacturing.