Sure, it’s painful to write a check to pay fines, but if you think that fine is the cost of OSHA/EPA non-compliance, you’re in for a rude awakening. The real cost of a fine from OSHA or the EPA isn’t just the number on the check, it’s a combination of Money, Time and Reputation.
Money – Sure, that check you write is money off the bottom line, but it also represents lost opportunities. Every dollar you pay in fines is a dollar you can’t spend to improve efficiency. It’s a dollar you can’t spend to expand your business. It’s a dollar you can’t spend on improved employee benefits. It’s a dollar you can’t spend on improved safety. It’s a dollar you can’t spend in the best interests of your business.
Time – You will spend an awful lot of time dealing with the aftermath of a fine. There are abatement documents, compliance meetings with officials, required follow-up, etc. Every second of that time is wasted time: time that would have been better spent doing the things your business is in business to do.
Reputation – You likely spend a small fortune building the brand name of your company and your products. Here is what the press release will look like:
The U.S. Department of Labor’s Occupational Safety and Health Administration has cited YOUR COMPANY for 15 alleged willful and serious violations of safety and health standards at its YOUR LOCATION, processing facility. The company faces a total of $279,000 in proposed fines, chiefly for deficiencies in its process safety management program.
“The requirements of OSHA’s PSM standard are stringent and comprehensive because an ammonia leak could have a severe or catastrophic effect on the plant’s workers,” said OSHA’s area director for YOUR LOCATION. “In this case, YOUR COMPANY knew that aspects of its PSM program were incomplete or inadequate and did not take steps to address those deficiencies. It is imperative that this employer scrutinize, update and properly maintain each element of the process to minimize hazards and protect its workers’ safety and health.”
Here’s what the headline for this story on the front page of your local newspaper will look like: YOUR COMPANY endangers workers.
Even if you manage to successfully appeal the fine, do you think the article that mentions your fines were dropped will be given the same prominence as the one that slandered you?
There’s also the increased scrutiny you will receive, both internally and externally. Internally your employees will start second-guessing every safety decision you make. Externally the regulatory agencies are more likely to visit you – it’s amazing how random audits seem to hit the same companies year after year!
The final cost to your company from an OSHA/EPA fine will dwarf the amount listed in the fine. Obviously we want to take our PSM/RMP obligations seriously to ensure the safety of our employees and the environment, but we should also be mindful of our PSM/RMP program’s role in COST AVOIDANCE as well.