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ATLANTA-Increasing globalization in manufacturing and the emergence of a global economy are forcing risk managers to take a worldwide approach to managing workplace health and safety programs.
That approach is recommended, even though local regulatory requirements vary around the world.
Those were the messages delivered by health and safety experts during a session at the Risk & Insurance Management Society Inc.'s annual conference last week.
Incentives exist to entice risk managers to take different approaches to workplace safety in different countries, said Zack Mansdorf, managing director of Liberty International Risk Services, a Boston-based unit of Liberty Mutual Group.
For example, he said, in a number of countries, workplace-related injuries will be treated by a broad state medical care system rather than under an accident compensation program. As a result, it may be difficult to demonstrate the cost-effectiveness of implementing a U.S.-type safety program.
But, using that as an excuse to not set up such a program is a "simplistic argument," said Mr. Mansdorf. "I see the more sophisticated argument as that there are issues of workers' training, loss of productivity" and other costs that weigh in favor of setting up these programs even when they aren't required, he said.
In some regions of the world, regulations may be implied rather than embodied in legislation and may be different for various types of organizations, warned Mike Williams, corporate environmental health and safety manager at Apple Computers Inc. in Cupertino, Calif.
For a global program of any sort to work, the first priority is to have a plan, advised Mr. Mansdorf, who is also president of the American Industrial Hygiene Assn.
Organizations with decentralized management or a high level of outsourcing may find getting their overseas operations to buy into the idea of a centrally managed global program a particular problem, he said. "You have to have a solid level of authority which will allow you to go into these other countries and suggest to them that they must meet some corporate standard," he said.
This point was reinforced by the experience of Mr. Williams. More than half of Apple's manufacturing processes are outsourced to operations in a number of countries around the world, and often Apple engineers will be working at suppliers' sites, where business practices-as well as local safety requirements-can vary widely, he said. To bypass this problem, the computer company specifies the materials, processes and equipment used by its suppliers, and trains its engineers in the use of safety equipment and how to avoid obvious hazards. But it also works with its suppliers to raise their workplace safety standards, not least because any failing can reflect badly on Apple.
"You must look closely at the vendors," said Mr. Williams. "Their business practices may not be acceptable."
The next step in putting together the global program is to ensure there are fully trained and capable employees on site. "You need to have local talent," said Mr. Mansdorf. This can be a dilemma in countries where the local culture means that people just cannot see the need for such programs.
The final foundation block for the global program is to establish a measurement system, which will enable performance data to be compared right across the global operations.
Best practices can be defined either by benchmarking against other organizations or using an organization's own expertise.
"What you should do is take the best of the best," suggested Mr. Mansdorf. For example, Swedish standards for electromagnetic fields are recognized as the best in the world-a multinational can follow those standards for EMF exposures and use other guidelines for chemical exposures.
Productivity, quality and cost all fall into the best practices basket. "My experience with companies with benchmarking is they've found that even though there were no regulatory requirements or even needs, even in areas where labor was extremely cheap, they found by putting in a more efficient process, and also improving safety, that it was financially rewarding for them," said Mr. Mansdorf.
Internationally recognized quality management standards-ISO 9000 and expanded standards, ISO 14000, which were published last fall (BI, Nov. 11, 1996)-do not include provisions governing health and safety programs, but that's no reason for an organization not to extend them to cover those areas, said Mr. Mansdorf. European companies in particular are increasingly using ISO 9000 standards on a voluntary basis. "Most are finding the additional costs very minimal and are finding performance improvements," he added.
Apple's Mr. Williams predicted that more organizations will adopt these ISO standards, which include continuous improvement provisions, as their clients increasingly demand them from their suppliers. "The best business case is when customers start to require it," he said.
It is difficult, though, to quantify the cost savings of implementing such a system, he acknowledged.
"I suggest you align your objectives in the risk management arena with the business objectives of the ISO 9000 and 14000 systems," Mr. Mansdorf said.
Michael Noble, director of consulting services at Liberty International Risk Services in Boston, moderated the session.