Legislature(1997 - 1998)
01/23/1997 01:35 PM Senate L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE
January 23, 1997
1:35 p.m.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Jerry Mackie, Vice Chairman
Senator Mike Miller
MEMBERS ABSENT
Senator Tim Kelly
Senator Lyman Hoffman
COMMITTEE CALENDAR
SENATE BILL NO. 41
"An Act relating to environmental audits and health and safety
audits to determine compliance with certain laws, permits, and
regulations."
HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
No previous Senate Committee action to record.
WITNESS REGISTER
Mr. Mike Pauley, Staff
Senator Leman
State Capitol
Juneau AK 99801-1182
POSITION STATEMENT: Reviewed SB 41.
Mr. Randy Ruedrich, Chairman
Alaska Chapter
International Association of Drilling Contractors
101 W. Benson
Anchorage AK 99503
POSITION STATEMENT: Supported SB 41 and offered an amendment.
Mr. Joe Hegna, Manager
Environment, Health & Safety ARCO Alaska
Alaska Oil & Gas Association
Anchorage AK
POSITION STATEMENT: Supported the intent of SB 41.
Ms. Janice Adair, Director
Division of Environmental Health
Department of Environmental Conservation
555 Cordova Street
Anchorage AK 99501
POSITION STATEMENT: Supported concepts of SB 41, but hoped to work
with committee on some details regarding the
privilege.
Mr. Douglas Donegan, Vice President
Trident Seafoods Corporation
5011 Jewel Lake Rd.
Anchorage AK
POSITION STATEMENT: Supported SB 41.
Ms. Pam LaBolle, President
Alaska State Chamber of Commerce
217 Second Street, Suite 200
Juneau Alaska 99801
POSITION STATEMENT: Supported SB 41.
Mr. Dwight Perkins, Special Assistant
Department of Labor
P.O. Box 21149
Juneau AK 99802-1149
POSITION STATEMENT: Opposed SB 41.
Ms. Toby Steinberger, Assistant Attorney General
Department of Law
1031 W. 4th Ave., Suite 200
Anchorage AK 99501-1994
POSITION STATEMENT: Commented on SB 41.
Mr. Al Dwyer, Director
Division of Labor Standards and Safety
Department of Labor
P.O. Box 107021
Anchorage AK 99510-7021
POSITION STATEMENT: Commented on SB 41.
Mr. Eric Yould, Executive Director
Alaska Rural Electric Cooperative Association
703 West Tudor Rd. #200
Anchorage AK 99503
POSITION STATEMENT: Supported SB 41.
Ms. Marie Sansone, Assistant Attorney General
Department of Law
P.O. Box 110300
Juneau AK 99811-0300
POSITION STATEMENT: Commented on SB 41.
ACTION NARRATIVE
TAPE 97-1, SIDE A
Number 001
SB 41 ENVIRONMENTAL & HEALTH/SAFETY AUDITS
Number 001
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee
meeting to order at 1:35 p.m. He introduced SB 41 as the first
order of business before the committee.
MIKE PAULEY , staff to Senator Leman, explained that SB 41 would
create an incentive system to encourage business and other
regulated entities to conduct voluntary self-audits of their
internal operations which would identify and correct any non-
compliance with environmental or occupational health and safety
regulations. SB 41 is similar to SB 199 which was considered in
the last legislature. The Senate approved SB 199, but it was left
pending in the House Finance Committee upon adjournment although it
was endorsed by many organizations.
Mr. Pauley explained that SB 41 establishes two incentives to
encourage self-audits:
(1) Limited Immunity - "Entities that conduct voluntary self-audits
will be immune from civil and administrative penalties for
violations discovered through a self-audit that are reported
promptly to the appropriate regulatory agency. The regulated
entity must take action to correct the identified problem and
prevent its future recurrence. Immunity is not available for
violations causing substantial off-site damage or serious on-site
injury."
(2) Qualified Privilege - "Reports generated from voluntary self-
audits will be considered privileged and therefore not admissible
as evidence or subject to discovery in civil or administrative
proceedings. This provision recognizes that an audit report by its
very nature is a self-incriminating document: It discovers
problems, identifies what personnel or management deficiencies are
responsible, and recommends corrective action. Studies show that
many businesses opt not to perform audits out of fear that the
resulting reports will be used by agencies or hostile third parties
as a 'road map to prosecution'. As with the immunity benefit, the
privilege has limitations. Privilege can be overcome if asserted
for a fraudulent purpose, or if the regulated entity has failed to
take required actions to correct areas of noncompliance."
Mr. Pauley noted that Senator Leman intended to remove Section 3 on
page 12. Last year the bill was changed so that the privilege
would only be applicable in civil and administrative cases.
Section 3 refers to criminal cases, which was determined
unnecessary by the drafter. Mr. Pauley informed everyone that
there are currently 20 states that have enacted self-audit laws
similar to SB 41, not 18 states as the sponsor statement says.
Number 167
RANDY RUEDRICH , Chairman of the Alaska Chapter of the International
Association of Drilling Contractors (IADC), said that SB 41 is a
good start toward encouraging improvement in Alaska's industry
compliance regarding health, safety and environmental laws. Mr.
Ruedrich attested to the effectiveness of properly supervised self-
evaluation and self-regulation as a way in which to improve health,
safety and environmental performance. He also discussed the 1988
North Sea incident which lead to an considerable inquiry by the
British government. However, Ward Cullen who presided over the
inquiry rejected the concept that the government or a special
interest group could determine the best plan for the industry. Mr.
Cullen instructed that each entity should develop its own health,
safety and environmental compliance plans appropriate for its
unique assets. Furthermore, the plan should be implemented and
practices should be initiated for continuing audit of progress and
correction of any identified shortcomings. Mr. Ruedrich noted that
the industry as a whole has been evolving toward Mr. Cullen's
approach since the inquiry. Mr. Ruedrich stated that SB 41 is good
for everyone involved: the state, the employees, and business.
Mr. Ruedrich said that with IADC's proposed amendment, operators
and drilling contractors will be able to easily share the results
of the self-evaluation reviews. This would help promote healthy
and safe work conditions as well as environmental compliance. He
emphasized that the owners of drilling rigs have been focusing on
the improvement of health and safety records for nearly three
decades. Statistics supporting this statement were discussed. Mr.
Ruedrich stated that similar strides had been taken in the industry
with regard to environmental compliance. SB 41 is beneficial in
that the bill allows concentration on the remaining inefficiencies
in the system. However, the aforementioned amendment is necessary
in order to allow disclosure of reports between an independent
contractor and its principles. The new environmental audit
privilege should be expressly applicable to these disclosures. Mr.
Ruedrich noted that this amendment as well as two other technical
amendments were attached to his testimony.
CHAIRMAN LEMAN acknowledged that the committee had received Mr.
Ruedrich's written testimony as well as the proposed amendment.
Number 300
CHAIRMAN LEMAN said that the amendment had just been received and
if the committee decided to incorporate it into the bill,
Legislative Legal Services would draft it.
JOE HEGNA , Manager of Environment, Health & Safety ARCO Alaska,
informed the committee that he wanted to make a statement on behalf
of all the members of the Alaska Oil & Gas Association (AOGA).
AOGA supports the intent of SB 41. Mr. Hegna informed the
committee that the majority of AOGA members perform self-audits.
He discussed SB 41 and the positive effects resulting from self-
audits. Mr. Hegna offered to work with the Department of
Environmental Conservation (DEC), the Department of Law (DOL),
OSHA, and the bill's sponsor in order to pass legislation with the
intent of SB 41.
Number 375
JANICE ADAIR , Director of the Division of Environmental Health for
DEC, thanked Chairman Leman for reintroducing SB 41 and removing
the criminal aspects of the bill. She hoped to work with the
committee and industry members to resolve some of the issues that
DEC would like to be addressed in the bill. She said that DEC
supported the concepts of SB 41, but some issues to prevent the
possible misuse of the privilege would be necessary. Those areas
are being worked on.
Number 404
DOUGLAS DONEGAN , Vice President of Trident Seafoods Corporation,
supported SB 41. SB 41 will encourage compliance with state and
federal regulations in a cost effective manner. Smaller operations
can become proactive under this legislation in order to ensure
their compliance without penalties. Larger firms will be helped by
SB 41 as well. Mr. Donegan stated that currently there is a built-
in disincentive for employees to report problems and noncompliance
due to the possibility of repercussions to the employee. SB 41
would deal with that disincentive. SB 41 should also ease the
burden on agencies by allowing them to inspect more facilities than
otherwise would be inspected. Mr. Donegan pointed out that OSHA's
Voluntary Inspection Program is an example of how inspections
increase when the possibility of penalty is withdrawn.
Furthermore, the problem is often dealt with in a more timely
fashion.
CHAIRMAN LEMAN inquired as to Mr. Donegan's background. He
informed the committee that before he worked for Trident Seafoods
Corporation he was the Director of Environmental Health for DEC for
six years. Previously, he served as a Special Assistant to the
Commissioner of DEC for a couple of years. Previous to that Mr.
Donegan served Whitney-Fidalgo Seafoods for eight years.
In response to Chairman Leman, Mr. Donegan said that Trident
Seafoods Corporation employs 1,248 full-time equivalent employees
in Alaska or 3,000 employees if left unadjusted.
Number 449
PAM LABOLLE , President of the Alaska State Chamber of Commerce,
supported SB 41. Ms. LaBolle reiterated the positive effects of SB
41. She applauded the fact that SB 41 does not allow continued
noncompliance to occur once the problem had been identified. She
felt that disclosure should be privileged and there should be
immunity. SB 41, she said, supports the concept that government
and industry should work together.
Number 467
MR. DWIGHT PERKINS, Department of Labor, thanked Senator Leman for
amending the concerns the Division of Workers Compensation had last
year. He provided the committee with a letter from the Attorney
General's office outlining the department's concerns.
MR. PERKINS stated that this bill would adversely affect the
enforcement activities of the Alaska Occupational Safety and Health
by restricting inspector access to documents relevant to an
employers compliance with ACOSH regulations. It would prohibit
ACOSH from using audit reports to establish employer knowledge of
hazards which is critical in issuing a willful citation. Repeat
citations cannot be issued if an employer voluntarily disclosed a
violation and claimed immunity as SB 41 provides.
Other regulatory agencies that encounter occupational hazards would
be prohibited from referring these hazards to ACOSH if the hazards
were contained in an audit report that had been voluntarily
disclosed to them. Employers would be immune from penalties if
they voluntarily disclosed an audit report to ACOSH. AS18.60.095
establishes penalties for violations of ACOSH standards and make no
provisions for immunities from penalties.
In the OSH Act of 1970, Section 18c2 and AS18.60.030.6 require that
the Department of Labor enforce standards at least as effectively
as those requirements found in the federal OSH Act. SB 41
abrogates the Department's authority established by Alaska
statutes.
MR. PERKINS said they fear the State could lose that portion of the
State Plan that had been given to them by the federal government.
In that case, federal inspectors could come in and get the
information that they are allowed to get now. He didn't know if
the committee wanted to challenge the federal government in court.
Regarding the 20 states with similar legislation adopted, he said
that no state had adopted these health and safety provisions.
He concluded that he was willing to work with the committee on
these issues.
CHAIRMAN LEMAN said his intention was to create a safer workplace
and a better environment in Alaska. He thought it made sense to
encourage businesses to audit their own health and safety
operations so they can make changes. MR. PERKINS agreed and said
that his concern is if they do that and someone gets killed on the
job, the State will not have access to those audits.
SENATOR MACKIE said he supported the intent of the legislation and
asked if there was a way to have similar incentives for employers
to find, identify, and correct inefficiencies in the workplace. He
asked if OSHA funding was a certain problem or was it someone's
opinion and was there a way to get around it.
TAPE 97-1, SIDE B
Number 590
MR. PERKINS replied that they have the ability to do audits from
within the Department now at no cost to the employers. All it
takes is a phone call.
SENATOR MACKIE asked what incentive there was for a business to
call them, if they could be prosecuted for significant violations
that may be found. MR. PERKINS replied when the Departments
consultants go in there, that audit becomes privileged from
enforcement. So there is time to fix the problem areas without
citations.
SENATOR MACKIE asked how that differed from what is proposed in
this legislation. MR. PERKINS said he couldn't answer that and
referred it to the director.
CHAIRMAN LEMAN noted on page 5, line 14 there was a provision for
getting the information. His intent was to have that concern
covered to protect from fraudulent assertions.
MS. TOBY STEINBERGER, Assistant Attorney General, explained that
there is a federal OSHA Act that gives the Department of Labor the
authority to approve State OSHA programs. One of the criteria to
have a State enforcement program is that it must be as effective as
the federal program in all respects, including procedures. One of
the procedures federal OSHA requires is the right to conduct
discussions and subpoena documents. This bill would provide
restrictions on what the agencies could subpoena.
Number 511
The second major difference, she said, is under certain
circumstances this bill provides immunity and federal law does not
provide any immunity. This would make the standard not as
effective as the federal procedures of enforcement. We now have a
federally approved enforcement program.
She noted that the Texas law that was mentioned has no affect on
federal enforcement because they don't already have a federally
approved enforcement program.
MS. STEINBERGER noted a letter from the Director of Region 10,
dated April 23, 1996 stating that the State would not be as
effective under this legislation. CHAIRMAN LEMAN said he is not
surprised that a federal agent would take that position and he
thought he could also reasonably argue just the opposite. He noted
that the State could conduct an investigation by taking it before
a judge or hearing officer.
Number 445
MR. AL DWYER, Director, Division of Labor Standards and Safety,
pointed out that on page 5, line 15 the Department can go to court
and require disclosure, but line 29, paragraph (b) says a party
seeking disclosure under this section has the burden of proving
that (a) of this section applies. He asked how an investigator was
supposed to determine that if the documents are not available.
He agreed that the worker would ultimately be safer if an employer
conducted voluntary safety audits, but unfortunately there are five
to 10% of employers who would do nothing with a safety audit. It
is the Department's job to uncover those. The only way they can do
that is to investigate them. Currently, he explained, they have
audits that have not generated citations.
He said that the chance of accidents occurring in small companies
is high because they cannot afford to hire full-time safety
professionals like oil companies do. They, therefore, target high
incident industries like logging and seafood.
MR. DWYER concluded that nine tenths of the people who do self-
audits will do a good job, but the ones that don't are their
concern.
CHAIRMAN LEMAN commented that the small percentage is not protected
by immunity or privilege, because to get any protection there has
to be immediate change in behavior.
MR. DWYER said his main concern is losing the program to the
federal government. CHAIRMAN LEMAN agreed with that concern and
said that was not the intent.
SENATOR MACKIE felt the intent was good and pointed out that
Chairman Leman had explained that the 10 percent who would not take
any action are required to take corrective action immediately or
face a penalty. Is there language in the bill that requires
immediate corrective action after a noncompliance is discovered, he
asked.
MR. DWYER expressed concern that he would be at a location, find a
violation and the company would claim immunity and say that a
safety-audit was done the day before. Who does the safety-audit?
What is the definition of "substantial injury"? When the
department investigates an injury or fatality and discovers a cause
that was included in a self-audit, that cannot be used as willful
against the company. Mr. Dwyer felt that willful would be
deserved. He pointed out that the department would have to know
what was in the audit in order to request a copy of the audit from
the court to use against the company.
CHAIRMAN LEMAN understood Mr. Dwyer's concerns and requested that
he get any further concerns to him in order for the committee to
address them.
JEFF CARPENTER , Industrial Hygienist with the Department of Labor,
supported audits. He explained that part of the function of State
OSHA is to provide audits to its employers. There are programs in
place that encourage audits and do much of what is the thrust of
the bill. The difference is that the program is sanctioned by
Federal OSHA.
Number 340
CHAIRMAN LEMAN asked Mr. Carpenter if he could give an estimate of
how many businesses use his services, especially in dangerous
industries. JEFF CARPENTER said that currently, there are about
eight full-time consultants and trainers. Generally, about 200
consultations and visits are performed annually. Also about 300-
500 training presentations are given annually. These visits are
mandated to be skewed to smaller employers in high hazard
industries.
CHAIRMAN LEMAN asked if OSHA's Voluntary Inspection Program leave
those who use the services open to third party lawsuits. JEFF
CARPENTER deferred to Toby Steinberger. MS. STEINBERGER said she
believed that the records held by consultation could not be used by
enforcement, but the records are subject to public access, and
therefore, CHAIRMAN LEMAN felt that was a negative side to using
OSHA's Voluntary Inspection Program and thought perhaps the law
regarding public access to those records should be reviewed.
ERIC YOULD , Executive Director of the Alaska Rural Electric
Cooperative Association, supported SB 41 and requested the ability
to provide substantive comments later on this legislation. Mr.
Yould believed that SB 41 was not a method to abrogate the
responsibility of the existing regulators, but merely another
mechanism for enhancement.
MARIE SANSONE , Assistant Attorney General for the Department of
Law, commented that SB 41 is long and confusing with regard to the
provisions referring to one another and suggested that the
provisions could be more uniform without as much cross-referencing.
With regard to the OSHA programs, Ms. Sansone explained that to
lawyers and program administrators "as effective" would be a
comparison of the remedies and penalties available in federal law.
CHAIRMAN LEMAN asked if anyone else in Juneau wished to testify on
SB 41. Hearing none, Chairman Leman announced that SB 41 would be
held until next Tuesday.
There being no further business before the committee, the meeting
was adjourned at 2:55 p.m.
| Document Name | Date/Time | Subjects |
|---|