Companies can’t afford not to put a premium on the safety of their workers in global supply chains.
This month, a Brazilian mining company agreed to pay $107m in damages and $186,000 to each family of the nearly 300 people killed when a tailings dam failed at its iron ore mine on January 25, 2015. The dam collapse pushed a wave of mining waste downriver into one of the country’s primary mines, leaving 248 dead and another 22 still missing.
Beyond the tragic loss of life, the company’s reputation has been severely damaged; its commitment to safety continues to be questioned by the government and media; company leaders could be facing prosecution, and hundreds of millions of dollars have been lost.
When I speak to other executives about disasters like this, I am often asked, “Could this happen to me?” It’s a question with both moral and fiscal ramifications. The answer is, “Yes, it is quite possible.”
Every year 2.3 million workers around the world die from work-related accidents or diseases. The Bureau of Labor Statistics recorded 5,147 fatal work injuries in the U.S. alone in 2017. Many executives have had to face circumstances involving workers dying on the job, and many more will have to deal with a costly financial crisis.
The greatest hindrance to safety and risk management is tradition. Industry leaders still use outdated paper and filing cabinet systems, simply because that’s the way it’s always been done.
It often takes an incident for businesses to realize that better (and newer) methods are needed to prevent something tragic from happening in the first place.
If luck is a matter of preparation meeting opportunity, then failure is a matter of being unprepared when meeting misfortune. Here are some ways that executives can plan for the worst, and still hope for the best:
- Review training. Assess how employees and anyone in the company’s supply chain are trained for safety.
- Identify gaps. Use a checklist to determine where changes are needed to meet the standard. Identify hazards, assess risks and determine controls.
- Plan. Understand the international standard (ISO 45001) and create and enforce enterprise-wide compliance requirements. Chart out a project plan in order to meet the standard.
- Educate. Retrain your employees on ISO 45001. Employees should be taught and tested.
- Design and document. Make sure all safety procedures are well documented. Redesign existing procedures to meet the new standard.
- Audit. Conduct regular internal audits to ensure compliance requirements are regularly met.
All of these measures have been proven to save lives, reputations and money. The steps also improve customer satisfaction, promote positive public relations, and make the company substantially more profitable and efficient.
The good news is that more tools are available than ever before to keep workers safe, and keep up with the complex requirements needed to be in compliance. While supply-chain risk management comes with costs, the alternative is even more devastating, not just on the company but on the lives, families and communities of those affected.
When disasters strike, I have yet to meet an executive who said, “I wish we weren’t so prepared,” or “All that safety training and was such a waste of time.” Your first responsibility is to make sure your employees make it home safe each day. Your next responsibility is to protect your company during unforeseen circumstances, so those employees still have a place to work.
You really don’t have time not to review, and make sure that you and all of the employees in your supply chain will be safe.
John Herr is CEO of Avetta, a provider of supply-chain risk-management services.