Review of the Department of Labour's interactions with Pike River Coal Limited
Executive summary
1. The inspectors from the Department of Labour (the Department) were well qualified, experienced and had very extensive interactions with Pike River Coal Limited prior to 19 November 2010. They were thorough in analysing key safety systems at Pike River mine relating to methane, ventilation, flame-proof equipment and type of explosives. Through consultation, and in one case prohibition, they negotiated better systems for dealing with these issues and their performance was commendable.
2. The one gap was general systems audits. However, in our opinion, if it came to a choice between the issue-focused audits the inspectors did and general systems audits, the approach taken by the inspectors was preferable. Still, we believe general audits should be incorporated in the inspectors work plans.
Terms of Reference
3. Our terms of reference require us to do two things:
- Determine a complete record of the Department's interactions with Pike River Coal Mine; and
- Assess those interactions with reference to the Department's regulatory role, the qualifications and experience of those undertaking it; and the support structures provided to them by the Department
The Department's interactions with Pike River Coal
4. The complete record of the Department's interactions with Pike River Coal until 2 November 2010 is contained in Appendix 4. These interactions overwhelmingly involved the Department's specialist mining inspectors. These interactions - and in particular those concerning methane, ventilation, flameproof equipment, explosives and the mine hoist - are described in detail in Chapter 6 and form the basis of many of our assessments below.
5. We have not been asked to investigate the causes of the explosions at the mine. We have had access to the Department's records and staff, but did not have access to Pike River Coal Limited's records or records of the Department's investigation of the explosions.
The inspectors' role
6. The Department recognises that because underground mining can be highly hazardous it needs to retain staff with specialist qualifications. The two mining inspectors and the Senior Advisor High Hazards (Extractives) all had such qualifications. They also had extensive appropriate professional experience. This was evident in their interactions with the mine.
7. The inspectors' expertise equipped them to ask searching questions, access overseas guidance material, engage with technical specialists and to require the mine to provide evidence to justify its proposed methods for dealing with important safety issues. The inspectors' communications with the mine displayed an eye for detail, questioning minds and a rigorous approach to the detailed proposals put forward by the mine. The processes they followed led to significant modifications to the mine's safety systems for dealing with methane, ventilation, flameproof equipment and explosives and resulted in negotiated agreements which appeared to be well considered and backed by evidence.
8. Given the small size of the mining industry, its statistical profile and the anticipated level of risk, the Department's allocation of resources to mine inspection is reasonable.
9. The workload of inspectors was also reasonable, involving, in the case of Mr Poynter, 50 assessment visits and 20 information visits for the mines, quarries and tunnels assigned to him, and including a target of four visits to Pike River Coal per annum. This workload is not markedly different from that found in comparable jurisdictions. There were more frequent visits in response to particular incidents, a voluminous correspondence between the mines inspectors and mine management on an extensive range of safety concerns and extensive oral communication with mine management and to a lesser extent with miners.
10. While we see scope for some improvements in departmental practices, we thought that the performance of the specialist mines inspectors at Pike River Coal was commendable.
The nature of the Department's regulatory role
11. The nature of the Department's regulatory role is set out in the Health and Safety in Employment Act 1992 (HSE Act). The principal plank of the legislation imposes the obligation on employers to take all practicable steps to ensure safety at work. The Department sees its role under the Act as being to ensure that employers are aware of their obligations, to support and assist them to understand and give effect to these obligations and to enforce as appropriate.
12. The Department aims to discharge this role and its wider responsibilities under the HSE Act by acting as a 'modern regulator'. This involves: having a client focus - reflecting and evolving with the community's needs and concerns; using regulatory power in a constructive, accountable and transparent way; having people who are experienced, trained and professional - who look for patterns and opportunities; being proactive and positive - identifying and focusing our resources on areas of greatest risk and impact; having staff who act as change agents - helping people to move beyond compliance to best practice; and ensuring fair and swift consequences where necessary.[1]
13. The inspectors' performance followed this aim. In each of the significant issues raised in Chapter 6, the inspector required and was provided with a detailed justification for the mine's approach to a major safety issue. The inspectors drew on internal and external sources of expertise to inform the discussion. In each case, the inspectors required detailed risk assessments and proposed safe operating procedures and subjected these to very detailed scrutiny and amendment. These exchanges resulted in negotiated agreements, indications that the proposal would amount to taking all practicable steps, or in one case a letter saying that the proposed use was prohibited.
14. We see these exchanges as examples of modern regulation where justifications which are specific to circumstances of the workplace and related to current practice on the issue are deployed. They were not constricted by prescriptive regulations which may not have been current or relevant, and they contained a level of detail which contradicts common misconceptions about performance-based legislation.
15. There was one gap in this picture. The inspectors did not conduct general safety systems audits. They were not required to do so by their work plans. The approach the mine inspectors took in scrutinising specific complex and technical mine safety issues confronting the mine, is an appropriate one for a technical and specialist area involving high hazards. However, this approach should be complemented by also paying attention to general systems. In high hazard industries, inspectors should engage in an integrated approach that involves systems audits and in-depth scrutiny of specific, often technically complex safety issues. We note that in future the Department plans to complement its regulatory approach with a greater level of emphasis on safety system audits. When it does so, it will need to equip its inspectors with the training and support tools to successfully perform this role.
Guidance material
16. Regulations, Approved Codes of Practice (ACOPs) and guidelines are an important means of elaborating on the general duties set out in the HSE Act and of determining if a duty holder has taken all practicable steps. Two sets of mining-specific regulations have been promulgated under the Act but less progress was made with regard to codes and guidelines.
17. The Department's initial intention was to rely on the mining industry to develop standards and guidance material but only with the establishment of MinEx, the Mining Industry Safety Council, was progress made. MinEx was established in 2006, and in 2008/9 produced two Codes of Practice and 12 sets of Guidelines. Despite criticism of these Codes from within the Department, the Department was slow to involve itself actively in the development of the MinEx Codes and Guidelines and it chose not to develop its own ACOPs. The Department should have taken this matter in hand before 2008, and it should have taken an active role in the development of the Minex Codes and Guidelines during 2008/9. We note that from 2009, the Department did become more active in the scheduled review of the Minex Codes and Guidelines. Further, since 2008 the Department has been reviewing and developing a range of guidance material across all areas of health and safety. In particular, following the Departmental Regulatory Review of Underground Mining (2006-2009), it has been developing guidance targeted primarily at small mines.
The Department's approach to compliance and enforcement
18. The Department's approach to compliance and enforcement involved a strategy known as Responsive Regulation[2]. Under this approach regulators adopt a combination of persuasion and coercion, escalating up an enforcement pyramid according to the particular behaviour and motivations of the regulated organisation.
19. Judged in terms of Responsive Regulation, the inspectors' interactions with Pike River Coal, and their compliance and enforcement policy responses were consistent and appropriate. The available documentation and the interviews we conducted suggested that Pike River Coal was cooperative and that mine management responded positively to informal recommendations and went to considerable lengths to implement them.[3]
20. There were a number of specific incidents where further enforcement action might have been contemplated. We examined each of these incidents in detail but concluded in each case that there were sound reasons why no further enforcement action was taken. The inspectors used advice[4] persuasion and negotiation to good effect and achieved their safety objectives without recourse to either administrative notices or enforcement action. But because they bargained 'in the shadow of the law', they and mine management knew that should their recommendations not be adopted, the inspectors had legal recourse. Such an approach was entirely consistent with the precepts of Responsive Regulation..
21. It is also important to draw attention to the growing evidence that more important than occupational health and safety management systems is workplace safety culture. At Pike River Coal for example, it might be of some concern that there was a series of incidents suggesting that there may have been a gap between the company's paper systems and actual practices underground.
22. It is not within our brief to explore the relationship between safety and culture at length. For present purposes, the main point is that it would have been exceptionally difficult for the inspectors to address issues of safety culture. The inspectors visited the mine only occasionally and so only obtained snapshots of what was going on there. While the inspectors could and did ask appropriate questions about the company's training program and did ask questions of individual miners with whom they had established a relationship, beyond this, they were not equipped to explore complex issues of safety culture (or the lack of such a culture), which are largely intangible and do not lend themselves to ready investigation.
Training and professional development
23. The capacity of the inspectors to discharge their responsibilities depends substantially upon the level and quality of training. At the present time there are gaps in Departmental training but these are already being addressed under an ongoing process via the Health and Safety Development Work Programme.
24. Continuing professional development remains the only area of outstanding concern. Such development often requires travel to Australia and is expensive. Nevertheless, it is essential in order to equip the mine inspectors with contemporary knowledge of mining hazards and how they are best addressed.
25. Given the small size of the New Zealand mining industry, seeking external advice seems to be a cost-effective option when this is not internally available. There is a strong case for developing a formal relationship with specialist Australian agencies for this purpose. Certain specialist functions could similarly be contracted out where no local expertise exists.
The Department's operating systems, guidelines, processes and practices
26. The Department has established a variety of operating systems, guidelines, processes and practices, some intended for external stakeholders, others for internal use. There were no significant disparities between the Department's stated approach and its operating systems, guidelines and processes, and the documents were consistent with the ways in which the Department understood its role under the Act.
27. However, the Department's high level documentation is in need of improvement if it is to fully articulate its broader strategy, as the existing documentation does not fully encapsulate that strategy. Lower level documentation must also be more fully developed if it is to provide the sort of practical guidance that is needed by front line officers.
28. This is a work in progress and a number of initiatives are already being developed. The Department could also benefit from adopting (suitably modified) existing tools already developed by international best practice regulators.
29. Notwithstanding limitations in formal documentation, we were impressed with the degree and sophistication with which front line officers and line management were able to articulate their aims, objectives and broader decision-making strategy. This, we assume, is a consequence of the quality of the various departmental training programs. Indeed, notwithstanding limitations in its existing documentation, the Department has gone a considerable way towards embedding 'modern regulatory practice' in the systems that underpin the work of inspectors.
30. Nevertheless, there is still room for improvement in articulating the Department's high level strategy and in its documented guidance to front line officers.
The Department's organisational structure
31. The relationship between the Mining Steering Group and the Senior Advisor High Hazards (Extractives) should be reconsidered.
32. In mining, as in other low frequency/high consequence areas, specialist inspectors play a crucial role. However, the current structure does not fully recognise and utilise that expertise. Under the Mining Steering Group structure, coordination takes precedence over expertise. That priority should be reversed.
33. The Mining Steering Group provided a valuable and necessary forum and coordinating structure. Each of the Department's regions was represented on the Mining Steering Group, reflecting the Department's general regional structure. While the Senior Advisor High Hazards (Extractives) and the mining inspectors were also members, the membership was predominantly non-specialist. Operationally, the mining inspectors had national responsibilities but were managed by the Southern region, non-specialist managers within the Southern region budget.
34. We suggest that a structure managed from the centre and based on expertise would have a number of benefits. In terms of expertise, the Senior Advisor High Hazards (Extractives) would be a logical choice to head that structure. There would also be benefits from elevating the status of the Senior Advisor High Hazards (Extractives), currently located at the fifth level of the management structure, and re-titling the position (e.g. Chief Inspector of Mines). The position would be more likely to attract and retain candidates who have previously held senior mine management positions and been responsible for large budgets and workforces. Increased status and integrating that role more effectively into the overall structure would also enhance the position in the eyes of the mining industry.
35. Adding operational responsibility for the work of the inspectors to the existing policy and technical advice role is also desirable. The specialist mines inspectors would benefit from the leadership and professional peer support that would flow from this sort of restructure. Further, the Senior Advisor High Hazards (Extractives) would more readily understand and prioritise mine safety issues than non-specialist supervisors. Deeper involvement in the operational aspect of the mining inspectors' work would better ground the policy advice work of the Senior Advisor High Hazards (Extractives) in issues of the day, and the development of regulations, codes of practice and guidance material. The resource implications of this proposal would necessarily need to be balanced with other departmental priorities.
36. To ensure the coordination of scarce resources, consistency across the range of workplaces, and appropriate budget allocations, the new position should then be linked to one of the Department's management groups. That could be done through a re-vamped Mining Steering Group, or by one of the existing management groups.
[1] See Department of Labour, Quarrying Business Plan 2010-2-12, Appendix.
[2] The phrase ‘modern regulation’ refers to the Department’s general approach to its responsibilities. Responsive Regulation is the strategy (consistent with but quite distinct from modern regulation) that it applies specifically to compliance and enforcement.
[3] Having said this, we must caution that we do not have full information about Pike River Coal’s operations, only what is available from Departmental files – and we were unable to interview any current members of mine management. We also did not have access to the Department’s HSE investigations.
[4] The official position of the Department is that it does not provide advice. As a matter of practicality, we believe it does (and should). We explain why in Chapter 7.
