The argument that "safety costs too much" is made not just by companies
but countries. In the global context, some of the developing nations have claimed
that safety in the workplace thwarts economic development. That's bunk. Leaving
aside the morals, the decision to concentrate on growth at the expense of safety
is bad economics.

ILO Study

A 2003 study by the International Labor Organization (ILO) suggests that putting
growth ahead of safety is backward logic. Developing countries should consider
the drag that workplace illnesses and injuries exert on a nation's economy
rather than the other way around.

According to the ILO, the average annual costs of work accidents and illnesses
per year are a staggering four percent of world Gross Domestic Product. Developing
nations would do well to note that those losses are not distributed evenly.
On the contrary, the nations with the weakest workplace safety protections --
that is, the developing countries that don't pay enough attention to safety
-- take the biggest economic hit.

For example, in Latin America, where workplace safety laws are scanty and only
sporadically enforced, the cost of accidents is $76 billion per year -- about
10 percent of GDP.

Developed Countries Also Got Problems

The fact that accidents exert the greatest overall drag on GDP of developing
nations is not to suggest that there aren't major problems in the industrialized
world. True, accidents don't take up as big a chunk of GDP in developed countries
as they do in developing ones. But that's partly because the former nations
have bigger economies and can absorb these losses.

A more telling fact, according to the ILO, is that developed countries "are
likely to register and compensate a higher proportion of casualties, and to
pay more per compensated case." In other words, accidents may not happen
as often in St. Louis as they do in Senegal. But they're much more expensive
when they do.

How Accidents Hurt the National Economy

Compensation payments are only one of the costs a nation pays for workplace
accidents and illnesses. The ILO cites four others:

• Early Retirements. In high income countries, about 40 percent of
  early retirements are due to disability.
• Absenteeism. Worldwide, an average of 5 percent of the workforce
  is absent from work each day (5.4 absentee days over a six-month period).
• Unemployment. The ILO claims that an average of one-third of unemployed
  workers are unemployed because they've suffered a disability that's not severe
  enough to be considered disabling and deserving of a pension or compensation
  but that is severe enough to keep the worker from finding another job.
• Poorer Households. Work injuries and illnesses seriously reduce the
  income of households making them less able to buy the goods and services supplied
  by other sectors of the economy.

Conclusion

The argument that spending money on safety thwarts economic growth, whether
it comes from a company's CEO or a nation's Minister of Finance, is a bunch
of baloney. Studies from the ILO and others clearly demonstrate the adverse
effects of safety breakdowns on a nation's economy. Although they differ according
to the nation's state of economic development and industrialization, these
effects are felt by every country in the world.

Source: "Safety in Numbers," International Labor Organization,
Geneva, 2003.

COMPANIES THAT DO IT RIGHT

THE TOP 10 MOST ADMIRED SAFETY PROGRAMS

Which company's safety program do you most admire? The magazine, Industrial
Safety & Health News (ISHN) recently asked safety directors to name one
organization that comes to mind as having a world-class health and safety program.
The company most often mentioned: Dupont, in a runaway. Known for achieving
the zero-accidents holy grail, Dupont got more than 10 times as many "votes"
as "second place" finisher 3M. Here's the entire Top 10. To read more,
go to ISHN's website, www.ishn.com.

1. Dupont: Achieved double-digit reduction in injury rates in 2003

2. 3M: Has spent more than $157 million on health and safety improvements
since 1999
3. Alcoa: Trying to make all management systems ISO-14001 compatible
and implement OSHAS 18001 at all locations
4. Dow: Achieved lowest ever illness and injury rate in 2003
5. General Electric: Cut injury rate 12% and lost time rate nearly
18% in 2003
6. Ford: 11 different plants had no accidents or lost workdays in
2003
7. GM: Cut recordable injury and lost-time-accident rates in half
in 2003
8. IBM: Long recognized as a health and safety leader
9. British Petroleum: Achieved dramatic results using Advanced Safety
Auditing
10. UPS: Pioneer that developed safety guidelines for bicycle messengers
back in 1907

Source: "Best-In-Class", "State
of EHS", ISHN, posted Dec. 1, 2004

EDITOR'S NOTE

Tell Us About Your Safety Success

Does your company "do safety right"? We want to hear from companies
in all industries, sizes and nations that do safety the right way. If you got
a good story but don't have time to write it up, no sweat. Just call me
(203) 221-2848, let me know the details and we'll write the story for you (subject
to your final approval, of course).

So come on and tell us your story. You owe it not just to your company -- which
will get the positive attention it deserves for doing safety right -- but to
your fellow SafetyXChange members who want to know about and replicate the safety
successes of their colleagues at other companies. When you share your stories,
it makes everybody safer. Thanks.

Glenn Demby
Editor-in-Chief
SafetyXChange

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