5 companies that got risk wrong - and paid the price

SPONSORED: Health and safety failings can have grave consequences - and new, larger, fines are reflecting that.

by MT Staff
Last Updated: 07 Feb 2017

There are plenty of potential downsides to not getting a handle on your risk management: from damaging team morale and losing the respect of your customers to inhibiting your productivity and innovation. Not to mention, of course, the grave potential cost to your staff, customers and their families. And if that wasn’t enough motivation, the government introduced new sentencing guidelines for health and safety failures from February 2016, and fines have shot up in the year since.

There were 19 fines of £1 million or more for risk-related failings in 2016, compared with three in 2015 and none at all in 2014. The 20 largest fines imposed last year cost the businesses involved a total of £38.6 million.

‘While you can’t put a value on human life, the level of fines now being handed out recognises society’s disapproval of serious corporate failures that lead to injury, illness and death,’ says Shelley Frost, executive director of policy at the Institution of Occupational Safety and Health (IOSH). ‘But protecting employees and others affected by a business’s operations can also be key to ensuring and maintaining an organisation’s strong reputation and ultimately contributing to its success.’

If you needed greater motivation to get your health and safety house in order, here it is. It’s grim reading, but it may make you think…

1. Merlin Attractions Operations

The theme park operator was ordered to pay £5m after two trains collided on its Smiler ride at Alton Towers. Five people were seriously injured in the high-profile accident, which had an impact equivalent to a 90mph car crash. The new guidelines stipulate a fine of £1.5m-£6m for a company with a turnover in excess of £50m, for high culpability and risking the highest level of harm.

2. ConocoPhillips

The gas company was the first large organisation to be fined under the government’s new guidelines, paying £3m after a series of uncontrolled gas releases at its offshore installation in Lincolnshire. The fine was set at £3m, even without casualties, because of the 'high likelihood of serious injury or death being caused – and a large number of workers were exposed to that risk'.

3. Cristal Pigment UK

In 2010 one worker was killed and another left with life-changing lung damage when they were overcome by a massive cloud of toxic vapour at a plant in Grimsby. The Health and Safety Executive (HSE) described it as a ‘high level of dereliction of duty’. The worst part? Toxic vapour would leak again at the same plant the following year. The fine: £3m in November.

4. Tata Steel

The metal giant was fined £1.98m after two workers suffered injuries to their hands in two separate incidents involving machinery. One lost two thirds of his left hand and his middle and ring fingers while trying to clear a blockage on a line manufacturing steel tubes, which had unsuitable guarding; elsewhere a team leader lost part of his little finger when his left hand was caught in a lathe.

5. Foodles Production

The maker of Star Wars: The Force Awakens landed a £1.6m fine when actor Harrison Ford broke his leg, dislocated his ankle and suffered deep lacerations while in rehearsal for the sci-fi blockbuster, at Pinewood Studios in Buckinghamshire. The accident involved a hydraulic door on the Millennium Falcon unexpectedly closing and pinning Ford to the ground. According to the HSE, it could have resulted in more serious injury – or even the actor’s death.

Accidents do, of course, happen, and fines are only part of the picture. Merlin was able to limit further damage to its reputation as a business by standing up immediately and taking full responsibility for the rollercoaster disaster – and by offering those involved promises of support for ‘as long as they need it’. Its management team didn’t hide their humanity either: they acknowledged that the far greater punishment was ‘knowing that on this occasion we let people down with devastating consequences’, before asserting they were ‘utterly determined will never be repeated’. They’re people too, after all.

Of course if you get health and safety right in the first place, you’ll go a long way to ensuring that the unthinkable never happens. Here are a few tips:

  • Get buy-in, and accountability, for health and safety right at the top of the organisation. Then communicate the approach to the rest of the company with a clear structure chart.

  • Make sure you’re competent. All businesses are required to appoint someone to assist in complying with health and safety law. This person needs to have the right training, expertise and knowledge to be on top of the task.

  • Know what you’re dealing with. Thoroughly identify all health and safety risks, and write them up in formal assessments.

  • Make it active. Policies and paperwork are no good sitting on a shelf getting dusty – so run regular reviews into how risks and safety procedures are managed, check that people are actually doing it, and make any changes where they’re needed. It’s only too clear what can happen otherwise.

For more ideas on how to build bulletproof health and safety, and for more on the government’s standards and guidelines, visit the Institution of Occupational Safety and Health