Commission's Report - Volume 1
Proposals for reform
The commission now provides an overview of its proposals for reform and sets out its recommendations. Most of these relate to the underground coal mining industry, but some have wider relevance. In formulating its recommendations the commission has taken into account the changes made or announced by the government and the regulator since the tragedy.
The Pike River tragedy was preventable but administrative and regulatory reforms are urgently needed to reduce the likelihood of further tragedies.
The Pike River tragedy contains lessons for government, regulators, employers and workers, especially in high-hazard industries such as coal mining, where the frequency of major accidents is low, but accidents can have catastrophic results.
Approval of permits
Oversight of health and safety planning should start early in the life cycle of a mining project. Pike, a new company with no underground coal mining experience, was able to obtain a permit to develop the mine, with no scrutiny of its initial plans for meeting health and safety requirements, and little ongoing scrutiny.
The origins of many health and safety problems lie at the design stage of a project. Health and safety considerations should be built into the design. They are not ‘add-ons’.
Health and safety compliance should be a condition of mining permits. Information should be progressively supplied by the permit holder to demonstrate compliance. Regulators should co-operate and exchange information before permits are issued, as the mine is designed and developed, and throughout its life.
The changes recommended by the commission have been foreshadowed in government proposals for strengthening the Crown minerals regime. The commission endorses those proposals.
The mining inspectorate
The effectiveness of the mining inspectorate had been declining for many years and by the time of the tragedy DOL had only two mining inspectors. They were unable to discharge their statutory functions. As well as inspecting underground coal mines they were also responsible for other mines and for quarries. The inspectors could not cover so many workplaces and in practice underground coal mines, including Pike River, were not paid sufficient attention.
The inspectors held first class mine managers’ certificates. They relied principally on physical inspections. They were not trained to audit the employer’s health and safety systems or analyse trends in data. Nor did DOL provide expert assistance to carry out specialised inspections of electrical systems or mechanical equipment. The inspectors favoured negotiated agreements with mining companies rather than using the range of tools available to them. This was in accordance with departmental policy.
The inspectors were at the bottom of the organisation and their managers were unfamiliar with their speciality and had difficulty in understanding their work. A Mining Steering Group was established to improve the effectiveness of the inspectorate and in February 2010 it advised senior DOL management about the lack of capacity and the potential for another mining disaster. The group’s request for a third inspector was not approved.
Changing the strategy
In 2005 the government issued a 10-year strategy to improve New Zealand’s poor record in health and safety. In 2009 DOL received submissions on the strategy from employers, unions and experts, which painted a sobering picture of the administration of the legislation by DOL and the department’s lack of capacity.
In 2011 the government issued a three-year action plan that identified five industries for priority attention. The strategy paid little attention to high-hazard industries. The risks in high-hazard industries are not revealed by personal safety statistics, such as injury rates, on which the strategy relied. Data on process safety (including preventative measures, analysis of high-potential incidents and assessment of safety plans) is required. This requirement has been known for 40 years and its implications have been widely discussed internationally.
Government strategy and action plans must give proper weight to the risks posed by high-hazard industries.
DOL’s main public accountability documents, the statements of intent and annual reports to Parliament, did not reveal any concern about DOL’s ability to administer the health and safety legislation. The statements of intent and the annual reports contained many high-level statements on outcomes and outputs but it was impossible to gain much insight into the performance of the mining inspectorate, or the health and safety inspectors as a whole. Measures used, such as the raw numbers of investigations carried out by the health and safety inspectorate, were not informative.
The gap between the high-level statements in those documents and the reality on the ground was remarkable.
DOL’s organisational strategies and structures have not helped. Administration of the health and safety legislation was delivered through the Labour Group, which was also responsible for employment relations services. Only at the inspectorate level was the focus exclusively on health and safety.
The Health and Safety in Employment Act 1992 (HSE Act) placed primary responsibility for health and safety on the employer. This was appropriate, but was unfortunately seen by DOL as somehow reducing its responsibility to actively administer the legislation. DOL’s approach did not accord with the scheme and purpose of the legislation. The act requires the regulator to provide information, education and guidance to employers and to take all reasonable steps to ensure that the act is being complied with.
The regulator requires a major change in thinking that is reflected in its strategy and structures.
A modern compliance strategy
A modern compliance strategy, like that operated by a number of other government agencies, identifies the extent to which employers do not comply with their health and safety obligations, the characteristics of those employers, the drivers of non-compliance and the remedial action required.
Implementation of the strategy includes selecting the right mix of interventions: changes to regulations, education and information, publicity, approved codes of practice, general or specific guidance and enforcement. Information systems and communications technology are designed to support the strategy.
Enforcement under a modern compliance strategy requires a risk-based selection of employers for audit and inspection, intelligence gathering, audit and inspection methodologies, work measurement and a graduated use of enforcement tools. Results should be continually fed back to the strategic level and into policy development. The work of the mining inspectors would then take place within a coherent framework.
The aim should be to develop an initial health and safety compliance strategy that can then be progressively improved.
A new regulator
Although the commission is aware that structural change is not a panacea for righting performance ills, it considers that the major improvements required cannot be accomplished rapidly without organisational change. The sad reality is that DOL’s performance in relation to health and safety in the mining industry has been so poor, at both the strategic and operational levels, that the department lost industry and worker confidence. DOL’s strategic approach to health and safety in general has also provided cause for concern, including its lack of national leadership, the need for approved codes of practice to guide employers and insufficient focus and expertise regarding health and safety at senior management levels.
Work to improve the machinery of government is ongoing. In July 2012 DOL’s functions were transferred to the new multi-functional Ministry of Business, Innovation and Employment (MBIE). The commission has been briefed on the high-level design of the new ministry. This separates policy and regulator functions for health and safety and places the regulator’s functions into a regulatory practice group responsible for administering a disparate range of laws and regulations.
Given the major improvements required to health and safety in New Zealand, the commission considers that it would be more effective for there to be a single organisation concentrating exclusively on health and safety.
There are three possibilities:
- The first is to establish a dedicated health and safety group within MBIE headed by a group manager reporting within the MBIE hierarchy.
- The second possibility would be to create an ‘autonomous’ unit within MBIE, headed by an independent statutory officer who has a direct relationship with the minister and who is required to report directly to Parliament. This is in line with the government’s proposed ‘departmental agency’ concept, which is the subject of a bill before Parliament.
- The third possibility is to establish a Crown entity headed by an executive board that sets direction, appoints the chief executive and maintains oversight. The board’s membership would recognise the responsibilities for health and safety shared by employers, workers and government.
On balance, the commission considers that the creation of a single-purpose Crown agency would be the best way to urgently improve New Zealand’s poor health and safety performance. The agency would work with MBIE on health and safety policy and would be accountable to the minister for health and safety administration in accordance with agreed performance measures.
Recent government initiatives
Following the Pike River tragedy the government has taken three steps towards improving health and safety administration. In August 2011 the minister announced the establishment of a dedicated inspectorate for two high-hazard industries: mining and petroleum. In May 2012 the minister announced extra funding of $37 million for health and safety administration, including an increase in the number of health and safety inspectors. The commission commends these initiatives.
The minister has also appointed an independent task force with a wide-ranging mandate to review whether New Zealand’s health and safety system is fit for purpose. The task force is to report back by 30 April 2013.
The current legislation
The HSE Act placed general and specific duties on employers to ensure the safety of their workers. The aim was to achieve the highest possible level of self-management by employers and the lowest level of compliance cost. The act was based on the reforms recommended by the Robens Committee in the United Kingdom 20 years earlier.
The idea was to replace ‘prescriptive’ legislation and regulation, which tended to focus on specific hazards in specific industries, with principles that could be flexibly applied to the health and safety hazards confronted by all employers.
The HSE Act imposed a general duty on employers to ‘take all practicable steps’ to ensure the health and safety of workers. The act promoted the ‘systematic’ management of health and safety, specified the order in which serious hazards should be managed and provided the regulator with a flexible range of enforcement methods.
Regulations and approved codes of practice
The move towards more self-management by the employer was appropriate but the necessary support for the legislation, through detailed regulations and codes of practice, did not appear. Instead, the opposite happened: such regulations as existed were repealed when the HSE Act came into force. The special rules and safeguards applicable to mining contained in the old law, based on many years of hard-won experience from past tragedies, were swept away by the new legislation, leaving mining operators and the mining inspectors in limbo.
After some years new mining regulations were issued including, in 1999, detailed requirements in relation to common hazards such as methane. Approved codes of practice or more informal guidance were never issued. The industry, through its association, the MinEx Health and Safety Council, issued some guidance to its members but without endorsement by DOL.
As a result New Zealand’s regulatory framework for underground coal mining is years behind those of other advanced countries, including Australia. It does not provide the support that employers and workers need.
Review of the legislation and regulations should be carried out by an expert mining task force. The members should include health and safety experts representing the mining industry, the regulator and the workers. (The expert mining task force should be separate from the independent ministerial task force that is reviewing whether New Zealand’s entire health and safety system is fit for purpose.)
The expert mining task force’s work programme should include designing approved codes of practice and other guidance. In relation to critical matters, approved codes of practice could be issued as an interim measure in advance of legislative and regulatory changes so that employers, workers and the inspectors receive immediate help.
Queensland and New South Wales mining regulations, standards, approved codes of practice and other guidance should be consulted extensively to avoid reinventing the wheel.
Fit for purpose
The HSE Act remains generally fit for purpose. The commission has identified a few changes, although the suggested expert task force may well identify more. Two areas in the act require early attention.
Worker participation (including contractors)
The legislation on worker participation should be strengthened. Workers sometimes do not understand health and safety rules or ignore them to get the job done. They should be entitled to receive key information on health and safety risks without having to ask for it.
Trained worker health and safety representatives should have the power to carry out inspections. Check inspectors appointed by the union should also be reinstated but must have special expertise in underground coal mining. Union check inspectors should operate on behalf of all workers, whether they are union members or not.
The worker representatives and the union check inspectors should have the power to stop operations if, and only if, workers are in immediate danger. There should be provisions for the regulator to remove an inspector if he or she attempts to use the power in other situations. The commission recognises that some mining companies do not favour this proposal but considers it would provide an extra defence against tragedies like that at Pike River.
Finally, the regulator needs to better promote the advantages of worker participation to both employers and workers. An approved code of practice is required and need not wait for legislative change.
Duties of the directors
The second area of legislation requiring early attention is that of governance by the board of directors. Directors should see health and safety risks as their concern and should give them the same careful attention they apply to other risks facing the company. Current health and safety legislation places general duties on employers, managers and others but not on directors. The statutory responsibilities of directors for health and safety in the workplace should reflect their responsibilities for good governance.
Regardless of legislative change, it is essential that directors and those in equivalent positions rigorously review and monitor their organisation’s compliance with health and safety law and best practice.
The mining regulations need major improvement. They have not kept pace with industry changes or best practice. Both the regulator and the commission have identified many necessary changes. The commission recommends that the following should receive immediate attention.
All practicable steps
The Health and Safety in Employment (Mining – Underground) Regulations 1999 often provide that the employer must ‘take all practicable steps’ to comply with the regulations. This formula, which makes sense in the HSE Act, makes no sense when applied to the mandatory requirements of the regulations, such as the requirement to provide a second egress from the mine. The qualifying words should be removed and consequential changes made.
Notifying the regulator
The employer’s obligations to notify the regulator of incidents need to be clear and comprehensive, especially in relation to ‘high-potential incidents’ (those that could have caused serious harm). This is vital so that the regulator has a better picture of the health and safety risks of the operation.
Health and safety management systems
The employer should be required to have comprehensive and auditable health and safety management systems, including principal hazard management plans. This is implicit under current law, which requires serious hazards to be identified and managed, but the requirement should be explicit. Australian and New Zealand standards already describe how the plans should be prepared and the standards against which they can be audited. Operations should not begin until the plans are developed and assessed by the mines inspectorate. The plans should be progressively updated and expanded as the mine is developed.
The regulator should issue an approved code of practice describing the minimum specifications of principal hazard management plans, including those relating to gas management, methane drainage, ventilation, spontaneous combustion, outburst potential, strata control and emergency response. Employee participation in the design and implementation of the plans should be a requirement. The code of practice could usefully provide a simplified template for small operators to use.
Training and accreditation
The regulator needs to supervise the granting of mining qualifications to managers and workers. This should be supported by changes to the regulations to comprehensively identify the key statutory officers, their roles, duties, qualifications and training. At present some positions are identified but only the certificates of competence are mandated. For example, there is no requirement for a mine to have a ventilation officer. The aim should be to align the new regulations with Australia, determine the training required and work towards a joint examination and accreditation process with that country. This will mean the mining workforce in both countries will be working to the same standards.
The statutory mine manager
The responsibilities of the statutory mine manager should be defined. Current regulations require the employer to appoint someone to manage the mining operation and personally supervise health and safety. No detailed responsibilities are defined. The Queensland law provides good guidance.
In some circumstances the statutory mine manager may not have the power to discharge the new responsibilities, for example because of budgetary constraints. The regulations should provide some protection for the manager by providing that if a health and safety proposal from the manager is not approved, copies of the proposal and the employer’s response are to be sent to the regulator.
Ventilation and gas monitoring
Placing main ventilation fans underground in coal mines should be specifically prohibited. It is unlikely that a mining company would do so in the future, given the consequences at Pike River, but the matter should be put beyond all doubt. Main fans should be required to be protected against explosion and other hazards, in accordance with appropriate international standards.
In addition to requiring a ventilation officer, standards for ventilation control devices, such as stoppings that control airflow, need to be specified.
Minimum requirements for gas monitoring systems are needed so that the mine’s atmosphere can be continually and comprehensively analysed.
Lack of guidance
The health and safety legislation requires employers to develop procedures for emergency management but no regulatory guidance is provided. There is guidance in Queensland and New South Wales, where the Moura No. 2 disaster was the catalyst for action. In New Zealand, the industry association, MinEx, has published guidelines based on the Australian procedures.
Lack of testing
Central to Queensland’s approach is regular testing of emergency management plans at four levels of intensity, from desktop exercises (Level 4) through to a state-wide exercise (Level 1) requiring the participation of the emergency services. This approach exposes in advance many of the problems that will be experienced in the difficult task of managing a major emergency.
The co-ordinated incident management system (CIMS)
CIMS is used by emergency services and the police to co-ordinate their activities in an emergency. It is sound in principle but requires review in relation to major emergencies at underground coal mines and in other high-hazard industries. CIMS does not contemplate a role for the mining company or specialists such as the MRS.
The review should include employers, the MRS, worker representatives, the regulator, the police and other emergency services. There should then be site-specific training and testing of the agreed approach, followed by fine-tuning.
The commission considers that the incident controller, co-located with the incident management team and experts, is in the best position to make the rapid decisions required. The incident controller needs underground coal mining expertise. This does not preclude the police from being the lead agency. CIMS is concerned with the horizontal co-ordination of agencies and alignment of their action plans, and does not displace the command structures of the police or other agencies.
The commission recognises that disasters have a political dimension and may require co-ordination at senior levels of government, high-level logistical support and sometimes the commitment of public funds. But the key decisions, for example on re-entering or sealing a mine, must remain with the incident controller and the incident management team on the spot.
The Mines Rescue Service (MRS)
The specialised MRS, operating under legislation through a charitable trust, is crucial to managing mine emergencies. In practice, its activities are wider than envisaged by the legislation. For the services it provides to new mines the MRS is not funded appropriately through the industry levies it collects, because the levies are based on production. A legislative and funding review is required, in consultation with the service and the industry.
Emergency equipment and facilities
The nature of emergencies in underground coal mines normally means that miners must rescue themselves, rather than wait for rescue from outside. The mine should have the equipment and facilities to facilitate self-rescue, including early warnings of gas levels, modern breathing equipment, changeover stations, navigational aids, alternative means of egress, adequate transport, communication systems and personnel tracking equipment. The mining company should be able to continue sampling the mine atmosphere through a tube bundle system. These emergency requirements must be addressed in regulations.
Operators are not required to provide the means to rapidly seal a mine so that its atmosphere can be controlled after an emergency. At Pike River shipping containers had to be used as an airlock to seal the mine until a permanent solution could be found. The need for airlocks and for docking stations to support the use of inertisation equipment should be examined.
New Zealand has a poor overall health and safety record compared with other advanced countries. In relation to underground coal mining New Zealand has had a tragedy every generation or so, after the lessons of previous tragedies have been forgotten. This time the lessons must be remembered. Legislative, structural and attitudinal change is needed if future tragedies are to be avoided. Government, industry and workers need to work together.
That would be the best way to show respect for the 29 men who never returned home on 19 November 2010, and for their loved ones who continue to suffer.