Making Companies Safe - what works? (CCA ... - Unite the Union

Gray and Scholz attempt to understand the large specific deterrent impact that they found in
the following terms. They argue that OSHA penalties act as a ‘wake-up call’ by refocusing
managerial attention on safety and health problems that may have been overlooked. They
also speculate that:
“The initial focus on specific OSHA violations, though perhaps annoying to busy
managers, triggers a broader review of performance that we suspect goes far
beyond a legalistic response to OSHA standards.” 35
And this is true even where the costs of these efforts may outweigh any future expected
penalty. 36
This is consistent with Hopkin’s study which reports that senior managers of large companies
were normally unaware of visits by occupational safety and health inspectors when such visits
did not result in any formal notices. 37 However, they did become aware of adverse inspection
reports when their companies were issued on-the-spot fines or some other formal penalty.
Similarly, Baldwin and Anderson’s survey of executives of large UK companies found that 71
per cent of companies that experienced a punitive sanction reported that:
“such sanctioning had impacted very strongly on their approach to regulatory
risks… For many companies, the imposition of a first sanction produced a sea
change in attitudes”. 38
Whilst the US data just discussed demonstrates a general deterrent effect, this effect is small
relative to the specific deterrent effect, possibly due to the fact that the chances of inspection
and detection of non-compliance are low. Nevertheless, there is other evidence to suggest
that general deterrence ‘works’. For instance, after reviewing the empirical studies from the
US and Canada, Brown notes that:
“There is good reason to believe that penalties enhance compliance in the short
term by threatening would be offenders with punishment, and in the long term
by changing attitudes about what is morally acceptable behaviour.” 39
Specific evidence for this is cited by Gunningham and Johnstone who note that:
“The State of Oregon increased its OHS penalties threefold from 1987 to 1992,
together with other changes to its enforcement, prevention, and workers
compensation programmes, and found that workers’ compensation claims fell by
over 30% and fatalities by over 21% from 1988 to 1992, even though
employment increased by 10%. The incidence of lost workday cases fell by over
21% from 1988 to 1991.” 40
In this country, Baldwin and Anderson report in relation to their survey of top UK executives,
that 57 per cent of respondents indicated that sanctions against other companies had
‘impacted their own management of risks “very strongly”. 41 There is also evidence to suggest
that employers are:
“affected by the cumulative effect of numerous prosecutions against other
companies and by hearing of the imposition of very large penalties or
jail sentences.” 42
In relation to the general deterrent effect of inspections, investigations and prosecutions,
Gunningham considers whether the deterrent values of prosecution could increase in the
event of a substantially increased likelihood of detection coupled with an increased penalty –
or with the deployment of more effective penalties than fines. He concludes, on the basis of
empirical studies from the US, Canada and Australia, that an increase in both the severity and
certainty of punishment would increase the general deterrent effects of inspection and
prosecution, though there is evidence that certainty of punishment exerts a stronger influence
than severity of punishment. 43 In relation to this last point, however, Johnstone warns that
this does not mean that the size of the penalty has no impact on compliance. Instead he
argues that penalties which are too low may have little condemnatory force and may
thereby reduce the deterrent effect of the law. 44 45