Stiffer fines first step to improving worker safety

Updated: 2018-05-29 06:39

(HK Edition)

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Ho Lok-sang points out high costs of building delays set against low penalties for infractions lead construction firms to cut corners, which can bring incidents

I have bemoaned poor industrial safety and pedestrian safety in an article in this column back in January (A smart city should put its focus on people, Jan 9, 2018). Sad to say, the poor safety records are no accident. They are built into our culture, and bolstered by a policy framework that fails to give sufficient weight to the value of the human life.

Statistics from the Labour Department showed that over the past 10 years, although convictions for violating industrial safety rules have increased, the average fine was a mere HK$9,045, with the maximum fine imposed at HK$250,000, far short of the legally allowed maximum of HK$500,000. Of the 38 industrial incidents that had resulted in fatalities, the average fine was a mere HK$29,000. The Hong Kong Construction Association is vehement that the fines should not be raised, saying that when an incident occurs delays are inevitable, and the contractor already suffers a heavy penalty as most contracts count the number of days of delay and requires onerous compensation for the delays. Although the contractor does suffer much heavier losses than is suggested by the fine, there is little doubt that small fines encourage contractors to take chances. A much heavier fine sends the right message: Life is valuable, and all parties concerned should not take chances. A stiffer fine will definitely save lives.

Stiffer fines first step to improving worker safety

In this regard, I would like to refer to my earlier commentary on construction-site fatal incidents (April 11, 2017). I noted that many construction projects involve very heavy penalty for delays. I then argued that the penalty for a fatal incident should be commensurate with the penalty for delays. The reason is simple. If delays are so costly to contractors, when they look imminent, they would take chances to avoid delays. In their calculation, each day of delay is big loss for sure; taking chances with workers' lives may still be a good bet if the fines are small. I wrote: "If one day of delay in the completion of a work would elicit HK$30 million, the loss of one life should at least require HK$30 million of penalty." Such fines would be frightening to contractors. But if they are not frightening, contractors will not do what is needed to prevent loss of lives in their construction sites.

The Chief Executive of the Hong Kong Construction Association Thomas Tse is opposed to the suggestion, made by some worker groups, of tying the fines for safety rule violations to the ability to pay of contractors. I disagree with this suggestion but there is actually a justification for it, which is to preserve the deterrence effect of the fines. It is well known that some countries apply what is known as "day fines" (fines in terms of days of income) to work out how much a violator of traffic rules has to pay. While I disagree with day fines for industrial safety rule violations because of the appearance of inconsistency, I am positive that the existing fines are ludicrously low. They must be raised many times over. The suggestion that after the fact the contractor would have borne the heavy cost of the incident and therefore there is no need to impose a larger fine is not logical. Before the fact, the contractor is tempted by the small fine to underestimate the cost of negligence. That is just human nature. There will be behavioral change when a big fine stares at you if you do not do things right.

We need to recognize that some accidents are more in the nature of "acts of God" than results of the contractor's negligence. There was an incident involving a taxi that slammed into the public-works site on a rainy day killing three workers in 2016. Strangely, in this incident the contractor was fined HK$360,000, a very high amount relative to other incidents that might involve greater responsibility on the part of the contractors. In that event, the taxi driver was charged with dangerous driving causing death and was given a prison sentence for 28 months plus suspension of the driver's license for five years. I would argue that if the court finds the contractor negligent in the sense that reasonable preventive measures would have averted the incident, then the heavy penalty should prevail. Thus the courts have to distinguish between cases of greater responsibility versus those of smaller responsibility on the part of the employer.

A recent study in the United Kingdom on penalties for breaches of health and safety rules presented 27 industrial-incident cases causing death. The fines ranged from 5,000 pounds ($6,664) to 3 million pounds, depending on business turnover among other things. But business turnover is not a good indicator for ability to pay even if making reference to ability to pay is appropriate.

We need a system that is fair and that will protect workers, and we must work out a new system for Hong Kong, instead of just copying from the UK or elsewhere.

(HK Edition 05/29/2018 page8)