Legislature(1997 - 1998)
01/15/1998 01:38 PM Senate L&C
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SENATE LABOR AND COMMERCE COMMITTEE
January 15, 1998
1:38 P.M.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Jerry Mackie, Vice Chairman
Senator Tim Kelly
Senator Mike Miller
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 205
"An Act relating to occupational health and safety audits to
determine compliance with certain laws, permits, and regulations."
PREVIOUS SENATE COMMITTEE ACTION
SB 205 - No previous action to consider.
WITNESS REGISTER
Mr. Mike Pauley, Staff
Senator Loren Leman
State Capitol Bldg.
Juneau, AK 99811-1182
POSITION STATEMENT: Commented on SB 205 for sponsor.
ACTION NARRATIVE
TAPE 98-1, SIDE A
Number 001
SB 205 - OCCUPATIONAL HEALTH & SAFETY AUDITS
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee
meeting to order at 1:38 p.m. and announced SB 205 to be up for
consideration. He said that the Senate Judiciary Committee
decided to deal with health and safety self-audits separately from
environmental self-audits because of concerns from the Department
of Labor and the Department of Health and Social Services. He said
that he believes both the environment and people's health are very
important. The incentives provided in this legislation are limited
immunity and privilege from using information in legal proceedings.
MR. MIKE PAULEY, staff to Senator Leman, explained that SB 205 is
modeled after the environmental self-audit bill enacted last year
by the legislature. For a starting point they took the
environmental audit statute and inserted the term "occupational
health and safety" wherever the term "environment" would otherwise
appear. The environmental audit bill was reviewed and revised by
five different committees of referral, first in the 19th
Legislature and then again in the 20th Legislature. It represents
the end-result of years of dialogue among the sponsor, the
Department of law, the Department of Environmental Conservation,
and affected industries throughout the State.
SB 205 provides two incentives to encourage individuals,
businesses, and local governments to review their operations and
examine whether worker safety is being protected.
Number 89
The first incentive is a qualified privilege. If a regulated
entity conducts an audit report, it enjoys a limited evidentiary
privilege. That means that the self-critical analysis in an audit
report cannot be used against it in a civil or administrative
proceeding. This evidentiary privilege is similar to a privilege
for environmental audit reports that has already been recognized in
23 other states and which is also being debated now in the U.S.
Congress. It is designed to overcome a structural barrier which
discourages many companies from undertaking an auditing program.
Self-auditing can be very expensive for some companies, and there
is a reluctance to undertake such an investment when there is a
fear that audit documents will simply be used by the government as
a "roadmap to prosecution." An audit report by its very nature is
a self-incriminating document. It identifies a problem, identifies
what individuals or policies may have caused a problem, and
recommends corrective action.
The privilege provision had strict limitations. It doesn't apply
to criminal proceedings, it can only be claimed if the person
conducting the audit provides 15-day advance notice to the State of
their plans to do an audit, and the audit must be completed within
90 days unless a longer period of time is negotiated with the
State. It does not extend to information that a State regulatory
agency discovers independently nor does it apply to data or
information that is already required to be maintained or be made
available to State regulators under existing laws and regulations.
The audit privilege can be overcome if a judge determines that it's
being asserted for a criminal or a fraudulent purpose and if he
determines the audit report reveals evidence that violations were
discovered, but not promptly corrected.
The second part of the bill provides the limited immunity.
Companies that discover problems through the process of self-audit,
who promptly report those problems to the State and who take prompt
action to correct the problem, will be immune from civil or
administrative penalties. Like the privilege incentive, the
immunity provision comes with a lot of strings attached. The
immunity is not allowed in criminal proceedings and does not apply
if the violation in question was already discovered independently
by the regulatory agency. Prompt efforts must be initiated to
correct the problem and prevent its future recurrence and, most
importantly, immunity is not available for violations that resulted
in, or threatened to result in, substantial injury to persons
onsite or to persons, property, and the environment offsite.
A 1995 study by Price Waterhouse surveyed 369 major companies
nationwide about their self-auditing practices. The study found
that nine percent of companies conducting audits had experienced
the involuntary disclosure or discovery of those documents. Twelve
percent of companies reported that they had voluntarily disclosed
the results of audits and then had the disclosed information used
for enforcement purposes against them. This sends an unmistakable
message to companies that proactive efforts to achieve compliance
may be punished by government regulators.
MR. PAULEY concluded saying that the bill's objective is to promote
a partnership between industry and the State - to work together as
a team to reduce workplace injuries and fatalities.
SENATOR HOFFMAN asked what the time-frame was for reporting
promptly and taking prompt action.
MR. PAULEY replied that was not defined because of the wide variety
of problems that might be reported. The immediacy of response
depends on how serious the problem is. Also, other factors may
contribute to the timing of the action, such as when construction
may take place or weather delays.
Number 200
CHAIRMAN LEMAN said he did not want the incentives provided by the
bill to imperil the lives or the health of anyone. He said that he
thought making the law in this area consistent with other areas may
help with self-auditing incentives.
MR. PAULEY agreed. He added that it's been reported to him that
companies in the State that currently do audits don't just audit
for environmental compliance and then come back a month or two
later and do a health and safety compliance audit. Their in-house
audit teams are usually called environmental health and safety
(EHS)units. Sometimes it's hard to distinguish between the two.
CHAIRMAN LEMAN said there is room for improvement in the fishing
and logging industries, two of the most dangerous occupations in
Alaska. Alaska's fatality rate is four times the national average,
he said. He praised Alyeska Pipeline Service Company's "Nobody
Gets Hurt" program with the objective of thousands of people hours
of employment without lost-time accidents and providing incentives
to employees to do that.
SENATOR MACKIE asked hypothetically what would be the effect if
someone got hurt while a company was in the process of coming up
with a correction to a situation.
MR. PAULEY answered him by referring the Committee to page 8, lines
7 where it says immunity is not available if the violation resulted
in or poses or posed an imminent or present threat of substantial
injury to one or more persons on the site audited.... Line 10 also
says that a disclosure is voluntary for the purposes of this
section only if the disclosure is made promptly after knowledge of
the information disclosed is obtained by the owner or operator.
Line 31 also notes that the violation must be corrected within 90
days or they have to enter into a compliance agreement with the
Department or municipality that allows for a longer period of time.
SENATOR MACKIE said his concern was if we left someone to continue
operation while an unsafe condition existed and not hold them
responsible for the safety of workers.
MR. PAULEY responded that he would have to defer that answer to
OSHA and the Department of Labor about what their authority is to
order facilities to cease operations to address unsafe work places.
That is beyond the scope of this bill.
SENATOR MACKIE said he wanted that addressed in a future hearing.
CHAIRMAN LEMAN noted that when the State of Alaska took on the
program for occupational safety and health primacy, our program had
to be "as effective as" the federal program. He asked if this bill
would still allow our program to be "as effective as" the federal
program.
MR. PAULEY replied that he believed it would, although there is a
difference in interpretation of that phrase. He thought we should
use a performance-based criteria, judging by the end result of a
safer work place. If the policies of this State are reducing both
injuries and fatalities at the work place, this is not only "as
effective as", but "more effective than," the federal program.
The Department of Labor maintains that it doesn't apply to the end
result, but rather to the mechanisms of enforcement. Under this
interpretation, if the federal government says that a certain
violation requires a certain penalty or fine and a State law
provides for anything different, then it by definition is not as
effective as.
CHAIRMAN LEMAN thanked him for his testimony, said they would hold
the bill for further work and adjourned the meeting at 2:05 p.m.
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