MINERS NEWS - National & International news from the hard rock, coal, heavy equipment, aggregates & mining industries

SAFETY CULTURE ADDS TO THE BOTTOM LINE
Safety Article by Harold Hough Dec/Jan 2009

Perennially successful companies have developed cultures that strive for perfection and see that “excellence” as an investment that contributes to the bottom line.
Ironically, one of the factors that mark these successful businesses is a real commitment to safety and an understanding that safety contributes significantly to corporate profits. This was proved in an Executive Workplace Survey done by the Liberty Mutual Group.

When American business executives were asked if they believed that workplace safety had a positive impact on a company’s financial performance, 95% said yes. They also said that for every dollar in direct costs for an accident, there were three to five additional dollars in indirect costs. In some ways, that is to be expected - saying safety is unimportant would be considered about as politically incorrect as anything.
What was surprising was who gave safety the most credit for contributing to the bottom line. While 5% said it had no positive impact and 71% said it had some positive impact, 24% responded that it has a substantial impact on financial performance. The 24% who said safety was a substantial contributor were the most successful businesses in their respective business sectors.

How significant was the impact of safety on profits? According to the survey, 61 percent of the respondents said that for every dollar invested in safety, three dollars were saved. However, 13 percent said that for every dollar invested in safety, ten dollars was saved. And where were the top performing companies? They were the ones that gave the “ten dollar for every one invested” answer.

SAFETY MEANS GOOD PUBLIC RELATIONS

A sound safety program also has a positive Public Relations effect. Society’s views about acceptable job-related deaths have shifted over the years. People expect to be able to work in a safe industry, which according to statistics has a one in one hundred thousand of having a fatality. Unfortunately, in the United States, the fatality risk in mining is one in 7,800 - a little worse than the risk of dying in an auto accident.
This is a critical problem for the mining industry. Thanks to environmentalism, people are questioning the value of mining as a whole. And, if our industry is seen as dangerous, it becomes even less valuable in the eyes of the public. That’s why the recent coal mining accidents were so damaging to the industry as a whole.

However, if one were looking for a successful mining company that didn’t have to apologize for sloppy safety practices, one would have to pick Newmont Mining. And, like other successful companies, they are seriously committed to safety. Newmont management believes better companies focus on safety performance as a core value and strive for superior performance. A great company is one that achieves and sustains superior performance and yet continues to improve through the value of “Business Excellence Through Safety.” Newmont says, “Safety is not an icon, mounted on a pedestal, to be revered. Safety is not a tool that is taken out of the toolbox as required or when instructed, for occasional use and then put away. Safety requires a considerable investment of time and resources and is no different from any other form of investment.”

Newmont‘s commitment to safety is seen in its Health and Safety Performance indicators. Leading indicators are designed to measure mining activities and prevent safety problems by spotting trends before they become problems. This allows management to act before problems occur. Some of these leading indicators include audit and inspection results. Others include comparing systems with technical standards. For instance, does the mine’s electrical systems meeting the latest electrical standards?

Newmont also looks at injuries as lagging indicators. Newmont applies a workplace injury classification that includes lost time injuries, restricted work injuries, medical treatment injuries, and total reportable injuries. Multiplying the number of injuries by 200,000 and dividing by the total number of exposure hours or hours worked by employees and contractors calculate the frequency rate of each injury type. The 200,000 multiplier is equivalent to a company with 100 employees, each working 2,000 hours in a calendar year.

The program has been successful. In 2004, the lost time accident frequency rate was 0.21. By 2007 it had been more than halved to 0.10. In addition, Newmont’s Total Reportable Accident Frequency Rate (TRAFR) also decreased by approximately 9% in 2007 to 0.84. The total number of reported personal injuries decreased from 407 to 366 in 2006. That’s the result when mine management sees safety not as an obstacle, but an objective and an investment. If more mining companies adhere to this principle, not only will mining accidents decline, but also profits will improve.