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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters

Code of steel

NZ Steel’s contractor engagement process is based upon a safety management code of practice which takes a highly collaborative approach. PETER BATEMAN reports.

You operate in a high-risk industry. You directly employ more than 1000 people at your multi-plant site. You engage dozens of contracting companies who, collectively, will have another 600 to 900 people working within your site at any given time. They do much of the highest risk work, and their rate and severity of injury is significantly higher than that of your own staff. An “us vs them” attitude prevails among some of the contractors, whose safety management practices vary wildly. What do you do?

In the case of NZ Steel, the response was to lead the development of a contractor code of practice on behalf of parent company Bluescope, then successfully implement it in a way which has reduced health and safety risk and enhanced the company’s relationships with its contractors. The initiative won the large organisation initiative category at the 2014 NZ Workplace Health and Safety Awards.

The COP is run by the company’s health and safety team and encompasses the procurement life cycle: pre-qualification audits of prospective contractors, check audits of existing contractors, engagement, management, and training of the company’s own managers and supervisors in its use.

Contractor safety advisor John Lee attributes the COP’s success to a number of factors, chief of which is its inclusive approach: the company decided early on that it would work closely with its long-serving existing contractors in a mentoring approach to help get them up to speed.

“We brought them on the safety journey with us because it’s good business. It really is a collaborative approach and it appears to work. There’s nothing worse than a rapid turnover of contractors with new people on site all the time.”

His colleague, safety advisor Sarah Parkinson, says the contractor companies vary widely in size, from quite large corporates to small family specialists, but the typical size would be a firm employing eight to 15 people. The company is aware of not over-burdening the smaller contractors with systems and procedures better suited to the larger players; but at the same time, procedures must match the risk of the work being undertaken.

“It’s not negotiable,” she says. “If you want to work here you have to meet our standards.”

Potential contractors are audited to AS/NZS 4801, ISO9001 and ISO14001 standards, as well as to the company’s own standard known as BANZ SEQ. The potential contractor’s past and current safety performance is assessed, and a selection of the contractor’s current workplaces is inspected to gauge the extent to which their safety management system is actually operating.

Parkinson recalls an audit done in 2012, in the early days of the COP, when the contracting firm in question had a new site manager in his first week on the job. The company scored low – in the 30s out of 100 – but when they were audited a year later they scored 75.

“He was all for the audit because it gave him a clear picture of the weaknesses in the business. The turnaround was amazing – not just their safety system but their actual on site performance, their lead and lag indicators.”

This particular company wasn’t alone in scoring poorly in the first round of audits. Lee recalls it was readily apparent many of them had quite a way to go. But contractors don’t grow on trees, especially around NZ Steel’s relatively isolated location south west of Auckland, so in many cases the health and safety team became coaches and mentors.

“Rather than just say, you guys aren’t good enough, you’ve failed, we worked with them on a continuous improvement programme.”

The safety team also has the task of training some 200 managers and supervisors in using the COP to engage existing approved contractors or to request an audit for a potential new contractor. The related intranet contains everything a manager needs to know: safety classifications, audit results, the approved contractor list by discipline, engagement procedures, contracts.

Feedback has been positive. When a plant supervisor needs a particular type of contractor, he or she simply selects a contractor from the intranet, safe in the knowledge they have already been audited, their staff have been inducted, and they understand the process.

“It means the supervisor doesn’t have to spend much time babysitting the contractor to bring them on site – just engages them, goes through the scope of work, gets the job done,” explains Lee.

The results? A significant reduction in contractor injuries, much improved hazard identification and near miss reporting, and a 70% reduction in plant spending on non-approved contractors (because contractors who have invested in health and safety to come up to speed on the audit are winning more tenders).

But the benefits go well beyond the raw numbers. The company’s regular contractor forum – which meets monthly – has been reinvigorated, and attendance is now over 80 percent. Contractors, says Parkinson, now feel they can freely give their views. She should know – before joining NZ Steel she used to work for one of the company’s contractors, so she has seen both sides.

“There’s no more us-and-them in the room, and we’ve worked hard to develop that, to make it as useful and as interactive as possible. Now contractors want to be there.”

As well as looking at statistics and procedures, at each forum meeting a contracting company is invited to stand and give a presentation on some of health and safety initiatives it has undertaken. People are happy to take part.

This is all some distance from how contractors used to be managed. Lee, who has been with the business nine years, recalls that contractors were managed by individual supervisors or plants, each of which would engage its preferred supplier for a particular task. There was no coordination, and safety consideration was minimal. Accordingly, contractor standards varied hugely.

The COP itself is of course subject to review. It was found there had been significant turnover of permanent staff in a couple of areas, so the safety team had to do some training work to ensure everyone was competent to apply the COP correctly. People doing procurement who require a piece of work not within the scope of the existing approved contractors now routinely select a shortlist of three potential new contractors for the safety team to audit. The result plays a big part in the selection process.

There was some pushback when the COP was first rolled out, especially from the smaller contracting firms, who might have felt NZ Steel was being overly zealous, or that the timeframe was too tight for them to bring their standards up to speed. Now, says Parkinson, contractors are reaping the business benefits. She cites a recent move by the company to ship ironsand offsite by road. The firm engaged for the job required quite a bit of input to reach a good safety standard.

“They’ve taken on board our standards and expectations and have applied them. They’ve really picked up their game, and now they have won additional business outside of NZ Steel as a result of the work they have done with us.”

The development of the COP was part of a directive from Bluescope’s Australian office. The New Zealand team led the work in conjunction with colleagues in Australia and elsewhere. The intention was not only to develop a method which would could be implemented in all of Bluescope’s plants and territories, but could also be adapted for use by any large company in any business sector which employs a significant base of contractors. Already, a Christchurch-based company, aware of the award win, has been to visit.

“They are on a different part of the journey, but they are putting together a contractor code of practice. They came to see what we are doing.”

Sarah Parkinson and John Lee will be speaking at the Safeguard National Health and Safety Conference in May.


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