Statement of the CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA 0N: OSHA OVERSIGHT T0: SUBCOMMITTEE ON INVESTIGATIONS AND GENERAL OVERSIGHT AND SUB- COMMITTEE ON LABOR OF THE . SENATE LABOR AND HUMAN RESOURCES COMMITTEE BY: ROBERT T. THOMPSON DATE: SEPTEMBER 23, 1981 STATEMENT on OSHA OVERSIGHT before the SUBCOMMITTEE ON INVESTIGATIONS AND GENERAL OVERSIGHT AND SUBCOMMITTEE ON LABOR of the SENATE LABOR AND HUMAN RESOURCES COMMITTEE for the CHAMBER OF COMMERCE OF THE UNITED STATES by Robert T. Thompson September 23, 1981 My name is Robert T. Thompson. I am senior partner in the law firm of Thompson, Mann and Hutson of Washington, D.C. and Greenville, South Carolina. I also serve the U.S. Chamber as a Regional Vice Chairman, as a member of its Board of Directors, and as Chairman of its Labor Relations Committee. Accompanying me today is Mark A. de Bernardo. Mr. de Bernardo is a labor law attorney on the staff of the U.S. Chamber, and serves as Committee Executive of its OSHA Task Force. We welcome this opportunity to express our views on the Occupational Safety and Health Act of 1970 (the its administration over the past decade, and our observations and hopes regarding its future administration. The U.S. Chamber is the largest federation of business and professional organizations in the world, and is the principal spokesman for the American business community. It represents more than 166,000 business firms, 2,700 State and local chambers of commerce, and 1,300 trade and professional associations. More than 85 percent of the Chamber's members are small business firms having fewer than 100 employees, yet virtually all of the nation's largest industrial and business concerns are also active members. With regard to the administration of the Act, we are particularly cognizant of the problems of smaller businesses, as well as issues facing the business community at?large. Besides representing a cross?section of the American business community in terms of number of employees, the U.S. Chamber also represents a wide manage? ment Spectrum by type of business and location. Major classifications of American businesses manufacturing, retailing, services, construction, wholesaling, and finance all have more than 11,000 businesses represented as members of the U.S. Chamber, yet no one group represents as much as 15 percent of the total Chamber membership. Further, the Chamber has substantial membership in all 50 states. Members of the Chamber of Commerce of the United States have a vital interest in the Act's administration (OSHA), its regulations andenforcement, and current regulatory policies, practices, and procedures. The Chamber has long espoused a policy of business concern and vigorous effort to protect American workers, strongly encourgaging industry to have responsible safety and health programs. In turn, we have also worked to protect the rights of employers in their efforts to comply with OSHA rules and regulations. In that context, we are thank? ful for this opportunity to (1) comment on OSHA's past performance; (2) suggest administrative changes; (3) comment on the actions and policies of the current administration; and (4) propose legislative action to render the Act itself more effective and more equitable. The Chamber recognizes a myriad of problems with the Federal government's past approach to, and enforcement of, workplace safety and health regulations, and is frustrated with past inability to have a major impact in helping employers reduce occupational injuries and illnesses. OSHA's overzealous regu? latory posture and its inability to establish its credibility as a positive force in the workplace have earned OSHA the dubious distinction as Washington's least resPected and most disliked regulatory agency. In fact, the business community's frustrations with OSHA are aptly demonstrated by a recent U.S. Chamber survey of its association members. The survey showed that more business groups rated OSHA reform a major concern than any other of 52 issues listed in the survey. OSHA's report card must truly be negative if a group of more than 800 business associations make OSHA reform its number one priority.-l/ The call for change at OSHA is indeed loud among our membership. The Chamber has recognized the need for, and voiced long?standing support of, OSHA reform. We were particularly active in the 96th Congress in support of OSHA reform and the Occupational Safety and Health Improvements Act of 1980, 1/ More associations called reform of OSHA a "major concern" nearly seven?out? of?ten associations polled than any of the 51 other issues listed in the 1981 Association Legislative/Regulatory Interest Survey. The survey was sent to all association members of the Chamber, and elicited 836 responses, of which 567 labelled OSHA reform a "major concern" (nearly 68 percent), and 676 called it a concern (nearly 81 percent). S. 2153-g/. We continue to be committed to helping effectuate major changes -- both administratively and legislatively in the administration of a law as important to employers and employees alike as the Occupational Safety and Health Act. The Chamber supports its mission, as conceived by Congress, to help assure worker protection its role as an educator, trainer, consultant, and provider of technical assistance; and the ultimate goals of providing safe and healthful working environments for employees. Although greatly disappointed by OSHA's past performance, we still think there is a role to be played by OSHA in helping protect workers and guide employers. Toward this end, this testimony is meant to present our perspectives in identifying OSHA's problems and providing constructive criticisms. We hope these comments will be helpful in creating a better environment to achieve the common goal of all affected parties enhanced worker protection. I. PAST PERFORMANCE Ultimately, the eleven?year history of the Occupational Safety and Health Administration is one of frustration and failure. Frustration on the part of employers hoping for a reasonable, workable relationship with an agency they can look to and rely on; on the part of employees hoping for a more meaningful impact in improving working conditions is the result. Failure 5? to reduce serious injuries and illnesses in the workplace; to form a working cooperative consensus among all affected parties; to adopt an effective mechanism for identifying and regulating on?the?job health hazards -- is the cause. See statements of Dr. Richard L. Lesher, on OSHA Oversight to the Senate Labor and Human Resources Committee, April 1, 1980, and Robert T. Thompson, on Occupational Safety and Health Improvements Act of 1980 to the Senate Labor and Human Resources Committee, April 15, 1980. g] (T)o assure so far as possible every working man and woman in the Nation safe and healthful working conditions 29 U.S.C. 651(b). OSHA, an agency with excellent goals but poor performance, faces a negative bottom line only small steps forward in some areas and in many respects, a negligible impact on workplace safety and health. There is no question that OSHA has had a positive impact in many areas and that the agency has played a major role in some significant advan- ces, most notably, the raising of the consciousness of safety and health concerns for all affected parties. Without a doubt, the level of safety and health involvement and interest in 1981 is far greater than in 1971, and OSHA is largely responsible. This is, perhaps, the agency's greatest achievement. Furthermore, in selected industries and with certain hazards, OSHA has developed an effective approach. But the regulatory successes are too few. What is more prevalent is the lack of discernible OSHA success the regulations which are beyond common comprehension and compliance, and therefore, in many instances, at various stages of unenforceability (chal- lenges, court rulings, neglect) and the inspections which so often target safe workplaces and cite non?hazardous conditions. While injury and illness rate statistics indict OSHA's past performance, the ultimate failure is OSHA's inability to win over the mainstream of American employers who remain resent? ful of inspections, skeptical of other OSHA programs, and unconvinced the agency can provide assistance. OSHA is a prime candidate for regulatory reform, and rightfully so. Perhaps no other Federal agency has triggered such vehement and widespread employer concern. The reason is what OSHA has done: polarized parties on safety and health issues; intruded on the collective bargaining arena; and enforced an adversary, and somewhat arbitrary, crime?and?punishment approach to what is a common concern protecting the American worker. The reason is also What OSHA has not done: it has not had a critical impact on workplace safety and health, deSpite over a decade of massive regu? latory effort. Employers simply feel that OSHA is not helping them protect their workers, and the Labor Department's own statistics support this contention. If we apply the principle of cost?benefit analysis to OSHA itself, a strong case is presented that OSHA's costs have been very high without a corres- ponding achievement on the benefits side of the scale. A) Costs of OSHA Compliance 3 Capital Expenditures: Business has made nearly $43 billion in capital expenditures on safety and health in the last ten years. In 1981, the figure is more than $5 a Current Expenses: Current expenses by industry on Safety and health, although harder to calculate, clearly exceed capital expenditures. By one formula, current expenses have totalled . 5 $73.2 billion since 1972 and will exceed $8.6 billion in 19817?f . Total Cost to Business: Capital expenditures and operating costs on safety and health total $116.2 billion in ten years and nearly $13.7 billion this year. Costs are most often passed on to consumers and in many industries have helped create a com? petitive disadvantage to foreign producers and a loss of jobs. 0 Cost to Taxpayers: OSHA's total budget has been more than $1.2 billion, and, in conjunction with its corollary agencies the National Institute for Occupational Safety and Health, the Occupational Safety and Health Review Commission, and State . . 6 OSHA plans approaches an aggregate budget of $2 billion;??/ McGraw/Hill Annual Surveys of Employee Safety and Health Expenditures by American Industry, 1972-80. Capital expenditure is defined as durable machinery (generally equipment expected to last three years or more) and structures. Earlier figures have been adjusted upward by McGraw/Hill as a result of capital expenditure data revisions by the Bureau of Economic Analysis, Department of Commerce. Based on the Cost of Government Regulation Study conducted by Arthur Anderson Co. for the Business Roundtable which concluded that based on an analysis of 48 corporations' total OSHA incremental costs, safety and health capital expenditures represent only 37% of total safety and health operating costs and expenses. U.S. Government Budgets, FY 1971?81; OSHA Office of Information, U.S. Department of Labor. B) Benefits of OSHA Regulation 9 Since OSHA's inception, the rate and severity of serious injuries and illnesses are up significantly, as are workplace fatalities. The rate of serious injuries and illnesses is up 30.3%, the rate of serious injury and illness severity (as measured in time off? the-jOb) is up 41.9%, and total workplace fatalities are up nearly 7/ a For the period 1976?79, a time during which OSHA regulation and enforcement was most stringent and an adversary attitude toward business prevailed, the rate of serious injuries and illnesses rose 22.9%, their severity rate rose 12.7%, and workplace fatali? ties rose 0 Conversely, National Safety Council statistics show a trend of significant decreases in industry's fatality and serious injury rates for 25 years after World war II. As the work force increased, injuries and fatalities also increased, but the rates of frequency did not increase as they subsequently have under OSHA's regulatory system. The key distinction is that although injuries, fatalities, and worker population have increased in both the pre? and post-OSHA periods, fatality and serious injury rates were decreasing in the period and have been increasing since the agency's incep? tion.?2/ A picture emerges of an agency which imposed heavy costs on business, consumers, and taxpayers, while injury and illness statistics apparently suggest that (1) workers were safest prior to OSHA, (2) workers became less safe in OSHA's first six years, and (3) workers Were least safe under the past administration. Fatality figures include an estimate of 900 workplace fatalities per year for employers with 10 or fewer employees for FY 1977?79, according to U.S. Department of Labor News Release of November 20, 1980. OSHA no longer records fatalities in this sector. All figures are from OSHA's Office of. Occupational Safety and Health Statistics. The last year for data 15 available is 1979. Ibid. National Safety Council statistics, 1945-71. -7- The fundamental reason OSHA has not been successful is that the law and the method of administering it encouraged an atmosphere of confronta? tion, adversary relations, and litigation, rather than persuasion, mutual accomodation and problem?solving. Whether for humanitarian reasons or simply as a matter of good business practice, all employers want to provide safe and healthful workplaces and to protect our most valuable resource our workers. Many employers have, in fact, made a fundamental commitment to safety and health in the workplace. Yet government, through OSHA, has not been perceived as cooperative. Rather, OSHA has been regarded as an adversary, concentrating more on citations and compliance with procedures than on reducing work?related injuries and illnesses. In short, OSHA has been unnecessarily punitive. OSHA will never achieve the Act's goal of safe and healthful workplaces nationwide until its approach encourages c00peration and mutual problem?solving between the government on one hand and employees and employers on the other. Our members', especially small businesses, most frequent complaints about OSHA are that: 0 Inspections are not focused on employers with the worst injury records or on real hazards causing the most injuries; 0 Compliance with many of the standards bears little relationship to workplace safety and health. In fact, in some cases, compli? ance actually increases the risk of injury; I Standards are difficult to understand, and mandatory methods of compliance are not only inflexible and unreasonable, but fail to permit equally safe alternative solutions. In this regard, the present variance procedure is too cumbersome and costly to be of any relief for most employers; 0 Enforcement is often arbitrary and inconsistent, both between establishments and for inspections in the same establishment. Citations, posting requirements, and fines are imposed even where inspections in the same establishment have previously found no violations, or where the same violations were not cited in other establishments; and 0 An adversary relationship on the part of OSHA discourages volun- tary compliance. Many employers believe that OSHA will find something to cite as a violation if the inspector wants to, even if the alleged violation bears little relationship to workplace safety and health. This not only discourages voluntary compliance, -8- it generates resentment and lack of respect for OSHA especially where citations and penalties are levied for minor violations, or for general duty clause violations where no particular standard applies. II. RECOMMENDATIONS FOR ADMINISTRATIVE CHANGES A) B) The Need for Changes The Occupational Safety and Health Administration has been plagued throughout its 11?year history, and more particularly during the last four years, by a lack of effective management, intense politicalization, regulatory extremism, uneven enforcement, and nomadic philosophical objec? tives. These factors have combined to render OSHA.less effective and less equitable than is acceptable for a Federal regulatory agency charged with as important a task as OSHA has protection of the safety and health of the American workforce. To the extent that OSHA poorly targets its enforcement and inappropriately sets priorities in rule?making, the ultimate goals of the Act are compromised. To the extent that employers are required by OSHA to misdirect their personnel time and effort and to misappropriate their economic and material resources, the goal of worker protection is similarly disserved. OSHA has, to a large extent, forced employers to concentrate on preventing citations, instead of injuries, minimizing its positive potential to effect greater workplace safety and health, and in some respects having a negative impact. Basic Problem Areas Requiring Administrative Reform OSHA's failures stem from three major problem areas: 1. OSHA's underlying, and undermining, philosophy. In the past, OSHA has taken an adversary posture towards employers, assuming that the difference between a responsible employer and an irresponsible employer is a $200 penalty;_lg/ assuming that all employers need policing and 19] The average OSHA penalty in FY 1980 was $192.55 according to Compliance Activity Report, FY 1980. lehk -9- a crime?and?punishment approach with surprise inspections and penalties; and ignoring the fact that most employers are responsible and act in good faith to protect their workers. Poor management and administration. OSHA has been handicapped by a pervasive lack of management skills in its own administration. OSHA has lacked a cohesive or comprehensive enforcement policy; control and direction over its Regional and Area Offices; and an effective evaluation procedure to measure the performance of its own employees. Recognition of what goes on outside Washington has been minimal so that OSHA is handicapped by (1) not maintaining control of its own personnel, and (2) not profiting from direct contacts with employers and experience in "the realities of the workplace," which can come only from first?hand involvement. A two?fold enforcement misapplication: (1) OSHA often goes to the "wrong" workplaces and (2) OSHA, when it does go to the right workplaces, often cites for the wrong "hazards." First, to a large extent OSHA has wasted its limited inspection resources more than 71% (41,269) of OSHA's FY 1979 inspections resulted in not a single "serious" citation being issued and more than 46% (26,78?) of all OSHA's FY 1979 inspections found no hazard at all even non?serious. This means OSHA_conducted nearly half its inspections at what it found to be hazard?free worksites. Second, better targeting would not solve all of OSHA's enforce- ment problems, since even if OSHA were inspecting the "right" workplaces those workplaces most hazardous it must cite for the "right" things -- the real safety and health hazards. To a large extent, OSHA does not. Many employers report that they have two sets of procedures: one to come into compliance with OSHA, and one to correct the hazards they themselves find to exist. C) Specific Recommendations for Administrative Changes Better targeting of enforcement at each of three different levels: where OSHA inspectors are sent in the first place; whether inspections should be conducted once safety records are evaluated; and second?level targeting within a workplace as to which area of the workplace may be ikel most hazardous and what processes or operations are canalng, or are to cause, injuries. Better hazard identification; more complete analysis of inspection and reported data; more selective refining of OSHA Log 200 information and identification and classification of injuries by type, location, and cause. Better and more thorough screening of employee complaints. More flexibility of abatement means with greater use by OSHA of performance standards and (2) acceptance for compliance purposes of personal protective equipment and clothing which is reasonably equivalent to engineering controls in effectiveness in the abatement of hazards. Increased cost/effectiveness consideration; demonstration of quantifiable benefits; issuance of economic impact statements which are more comprehen- sive and delivered at an earlier stage in the rule-making process; and greater demonstration of economic and technological feasibility. Less involvement in labor relations issues and a philosophical commitment in OSHA to consider the Act a safety and health law, not a labor law. Greater emphasis on, cooperation with, and encouragement of OSHA state plans under 18 of the Act. OSHA should move forward expeditiously in certifying and coordinating state plans to ensure greater utilization of state resources for the goals of the Act. -11- a The agency should install quality control functions and meaningful, consistent review of staff's performance. Regional administrators should be brought in to review current policies on enforcement on a regular basis. An independent audit program should be utilized with a well?developed standard of performance set for both regional and area directors. These administrators should be held more accountable for enforcement decisions and policies within their jurisdiction. 11/ OSHA should have one, and only one, post?Marshall v. Barlow's, Inc. "enforcement scheme or plan" which is made public, and highly? developed and refined for inspection targeting purposes. A con? sistent and pragmatic general schedule inspections plan would heighten the credibility of the agency and help it achieve greater injury and illness reduction results. 0 The agency should intensify the upgrading and training of compliance officers to ensure competence, industry familiarity, and uniform compliance officer enforcement policies. Inspectors should be schooled not only to identify hazards, but also to know abatement procedures and alternatives, and to "know" the industry itself which is being inspected a past program was positive in instructing insPectors in the techniques of sloping and shoring, which assists these compliance officers when inSpecting trenching operations on construction sites). 0 Recognize that labor?management cooperation and mutual respect are necessary components to effective safety and health programs. Avoid bias and extreme positions, as well as actions which may set labor and management against each other. 0 Rely more heavily on "good science;" utilize NACOSH and CACOSH to a greater EXtent; develop a NIOSH relationship which will establish that agency as a support research organization and not as a secondary enforcer; rework OSHA Cancer Policy to develop viable framework for carcinogen 12 . regulations consistent with IUD, v. API r?j benzene dec1sion. 436 U.S. 307 (1978). lg] 448 0.5. 607 (1980). -12- Curtail overuse of general duty clause, limiting its use to those situations which truly "are causing or likely to cause death or serious physical harm.? Upgrade various consultative and training programs to ensure more productive utilization. Explore alternative possibilities and uses for employee?management advisory committees; self?inSpection and self?auditing programs; and employer incentives for use of independent consultative services or methods of incorporating employee input into safety and health programs. While adopting a performance?oriented rule?making approach to all new and existing standards, when possible supplement all regulations by non?mandatory guidelines which suggest methods of compliance. Develop a regulation dealing with employer communication of hazardous information to employees in the workplace which stresses handling procedures and accident prevention, rather than the overspecified disclosure requirements of the earlier proposed and revoked labeling standard. Cut back on double? and triple?citing of multiple respondents at multi?employer worksites by restricting issuance of citations, when possible, to the single controlling, most responsible, and most able- to?correct employer. Make available simplified and more flexible use of 6(d) variance procedures so that employers can innovate alternative yet equally protective methods of compliance and utilize the variance procedure to satisfy compliance requirements for enforcement purposes. Develop a comprehensive evaluation process for New Directions grants; exercise stricter control over selection of grantees to prevent abuse of grant funds and ensure more productive projects; and more effectively audit grant programs after issuance. Strengthen OSHA's record?keeping, statistic?keeping and evaluating, and hazard identification capacities and procedures. Promote better integration of the functions of the OSHA Office of Occupational Safety and Health Statistics with the Bureau of Labor Statistics. -13- Create an on?going standards deletion project and team with continual oversight of existing regulations and regularly?scheduled six?month standards deletion deadlines. EQMMENTS ON THE PRESENT ADMINISTRATION DesPite the myriad of problems at OSHA, the Chamber is greatly heartened and encouraged by the already significant progress and promise of much greater reform under the current administration of Assistant Secretary Auchter. Although the patient remains ill, the prognosis for recovery has at no time in the history of the agency been brighter. We recommended, as a top priority in the selection process for an OSHA administrator, a person with administrative capabilities and strong managerial skills. The agency was sorely in need of stronger, more centralized and account- able leadership. Mr. Auchter has shown himself to be just the man and the manager that was needed. Beyond his administrative abilities, we applaud his and his staff's conviction and dedication. We also reiterate our full support of, and commitment to, the Reagan Administration's goals for regulatory reform and the agenda for more sensible regulation at OSHA. We are confident that the regulatory priorities and philosophies of this Administration, if embraced in a cooperative air and continued on their present course, will benefit both employee and employer alike and gain OSHA the credibility and re3pect it has long lacked. Although we give overall high grades to the current administration at OSHA, in many respects this is only a preliminary assessment. Mr. AuChter, bOth by the plethora of problems he inherited and his own energetic and ambitious regulatory agenda, is only in the early stages of true administrative reform. Many of OSHA's positive programs are only in their conceptual stage, and many significant regulations hearing conservation programs and access to medical and exposure records, for example have been substantially stayed and must be thoroughly re?evaluated and reworked. Although much remains on the regulatory calendar and many reforms are yet to be delivered, we are confident the current administration will succeed. OSHA's disappointing track record makes it a prime focus for regulatory reform and a highly visible and even symbolic vehicle for the Reagan Administration -14- to deliver to the American public on campaign regulatory reform promises. The Chamber pledges its continued support and cooperation toward these goals. IV. THE ROLE OF ORGANIZED LABOR Organized labor has a deep and legitimate interest in issues and efforts affecting occupational safety and health. It represents a major party in inte? rest and has the capacity of playing a critical role in helping achieve safe and healthful working conditions for American workers. Labor?management advisory committees in some instances have been remark? ably successful in assisting overall safety and health efforts, internally resolving safety and health grievances, and promoting self?inspection programs. The current administration at OSHA is, of course, particularly supportive of labor?management advisory committees, and the Chamber recognizes the utility and positive potential for such c00perative efforts. Unfortunately, "cooperative" is not the adjective we can use in describ? ing the attitude of many of organized labor's representatives. In three signif- icant areas, union behavior has often been counterproductive: misuse of safety and health issues for leverage against management; steadfast refusal to partici? pate constructively in OSHA reform efforts; and failure to cooperate with or assist the new administration in development of policy and programs. A) Misuse of Safety and Health Issues for Leverage Against Management At times unions have shown a pr0pensity for misusing the Act and the agency for non?safety and health purposes. Many employers report that two things tend to occur at contract negotiations time, a proliferation of employee complaints to OSHA (and therefore a proliferation of OSHA inspections), and (2) a proliferation of union grievances on safety and health directly to the employer. It is doubtful that the workplace is any more or less safe at bargaining time than at any other time during the collective bargaining agreement. Yet, local unions often use OSHA for leverage in collective bargaining, or as an organizing tool at non?union plants. B) Steadfast Refusal to Participate Constructively in OSHA Reform Efforts The union response to OSHA reform efforts has been uniformly negative. No one can call OSHA a model agency or contend that its first decade did not -15- illustrate significant problems at the agency and in the Act. Yet, organized labor has demonstrated a studied disinterest in reform, stonewalling such efforts as the Schweicker4Williams Occupational Safety and Health Improvements Act of 1980 (5.2153) and refusing to come forward with constructive recommenda? tions on how the Act can be amended to produce more effective worker protection. OSHA reform has long been a legislative issue of defensive posturing and political expediency for organized labor the strategy to use defeat of OSHA reform as a rallying cry and mechanism for promoting unity taking priority over serious efforts to make OSHA more workable and effective. C) Failure to Cooperate With or Assist the New Administration in Development of Policy and Programs Finally, significant segments of organized labor have misused safety and health issues for political expediency in the current administration of Assistant Secretary Auchter. Unions have frequently overreacted to recent agency actions, and in other instances have repeatedly refused to participate in, and cooperate with administration officials on, proposed policy, program, and regulation pro? mulgations and changes. Most recent OSHA actions have been either internal reorganizations or administrative stays pending reexamination and reevaluation, with neither regulatory prejudgment existing nor comment opportunity taken away. Organized labor must better recognize both the need for collegiality and collective effort, and the need to try a new approach at OSHA where the tried approach was not working. As much as ever, it is time to mutually discuss rational ways to reform OSHA. LEGISLATIVE RECOMMENDATIONS FOR OSHA REFORM For many reasons the Occupational Safety and Health Act of 1970 is a vague and imperfect piece of legislation. It was enacted after heated debate and amidst significant controversy. Final passage was achieved in an air of political compromise, which may help explain the vagueness of certain provisions and the absence of others. It deals with an extremely complex subject in an ever?changing field. Furthermore, in the years since passage of the Act, OSHA has learned by trial and error, the state of the art in occupational safety and health has evolved substantially, and American society as a wholeghas changed significantly. eleven years, the Act has never been amended. _16l Yet, despite all these factors and the passage of The Occupational Safety and Health Act, an imperfect piece of legislation, sorely needs to be made less imperfect. A) Solution: Provide for Performance?Based Exemptions From Routine Safety InSpections. Problem: OSHA spends much of its limited resources inspecting what it finds to be totally or relatively safe workplaces workplaces which should not be included in its targeting systemi In discussing our recommendations for administrative changes earlier, we mentioned that the vast majority of OSHA inspections over 70 percent find not even a single "serious" violation. OSHA simply often goes to the "wrong" workplaces. OSHA should target its inspections better so that it goes to the more hazardous workplaces where it is most needed and can be most effective. This can be accomplished by exempting from routine safety inspections those employers who do a good job of preventing injuries relative to their industry. With so many workplaces (nearly 5 million), and 3,000 total Federal and state compliance officers, OSHA needs to distinguish better between the hazardous and the safe workplace and exempt and reward deserving employers. The Section 8 Inspections, Investigations and Record?keeping section of the Act should be amended to exclude from routine safety inspec- tions any employer whose lost workday case rate (serious injury average) is less than the average rate for his industry. Health hazard inspections, imminent danger inspections, fatality or multiple hospitalization accident investigations, and employee complaint inspections would not be exempted. Lost workday case rates should be measured at the most precise Standard Industrial Classification code for which such data is published. The OSHA small business exemption from routine safety inspections, with exceptions, for small businesses in safe industries'(now an annual appropriations amendment) should also be amended to be included in 8- This would complement the above amendment by avoiding conflict with the current small business OSHA paperwork exemption. B) _17_ Igrovide For Increased Cost?Benefit Consideration in Rule?Making Problem: American society in general, and the American business community in particular, frequently have been detrimentally affected by a plethora of misconceived and unreasonable regulations. One major problem has been the forced misallocation of finite resources. In the safety and health area, for example, employers are sometimes compelled by OSHA to expend much of their time, effort, and safety and health dollars in abating what is, in fact, a non?hazard. Recognizing that there is a need for a more pragmatic regulatory end?product which is at once more effective and more equitable, the current Administration has made cost?benefit analysis a cornerstone of its regulatory approach. OSHA's rule?making history has been particularly plagued by a lack of sound science and compelling impact analysis. The paramount example is OSHA's ill?conceived standard for occupational exposure to benzene, struck down consecutively by two courts because OSHA did not justify the need for the regulation and satisfy the benefits side of the cost-benefit formula.ll?/ OSHA simply has not done a good job of identifying which workplace hazards it will regulate and in what order, in what manner, and to what level the regulation will be set and enforced. Furthermore, the Act itself is neither dispositive nor particularly enlightening regarding OSHA use of cost?benefit analysis, particularly in light of the recent Supreme Court decision upholding the cotton dust standard. 13/ Although the Act includes such language as "reasonably necessary or appropriate? l2/ and "to the extent feasible? lg] in prescribing health standards, there is no explicit or implicit indication of Congressional intent on cost?benefit analysis. In light of the cotton dust decision, in which the Court held that cost?benefit analysis is not reguired by the Act, which by implication held that cost?benefit 12/ IUD, V. API, 448 U.S. 607 (1980); API V. OSHA, 581 F.2d 493 (5th Cir., 1978). il?/ American Textile ManufaCturers Institute v. Donovan, 2d 185 (June 17, 1981) 29 U.S.C. 652(8) lg] 29 U.S.C. 655(b)(5) 69 C) Solution: -18- analysis is permitted under the Act, and which muddied the waters on this already ethereal subject, it is necessary for Congress to legislatively explicate its intentions on cost?benefit analysis for OSHA. Amend the Act to require cost?benefit analysis to be performed by OSHA for its safety and health standards. This would clarify Congress' intent; avoid protracted litigation; resolve the issues posed by the Supreme Court's cotton dust decision; bring OSHA in line with other regulatory agencies required to perform cost?benefit analysis under Executive Order 12291; instill long?term consistency into OSHA's rule?making process; and render future OSHA standards more rational and more responsible to the overall goals of worker protection. The Act can be amended to include a new 6(h) in the 6 Occupational Safety and Health Standards section which would require OSHA to establish that a significant risk exists (there is a hazard) and perform a cost?benefit analysis (the hazard is worth fixing) before issuing a safety and health standard. Define "Feasibility" Statutorily Problem: There is a need for a direct expression of Congressional intent in several very significant areas. As with the status of cost?benefit analysis, the precise meaning and import of the concept of ?feasibility? is somewhat vague, and judicial determinations have often muddied the waters rather than cleared them. Certainly, economics should not be the predominant or controlling factor in safety and health regulation. But economics should be a consideration and must be factored into the formula if we are to achieve equitable and effective workplace standards. The Federal government must recognize that it does not regulate in an economic vacuum and that it is in the interests of all affected parties that our finite resources be expended in the most effective manner. OSHA has not always shown itself to be cognizant of these regulatory realities. Besides identifying both the problem.and solution, OSHA must also demonstrate that the solution can be achieved (technical feasibility) and is worth achieving (economic feasibility). D) _19_ Amend the Act to alleviate some of the vagueness problems This and provide better direction to the regulator and the regulated. can be accomplished by amending the 3 definitional section to create a new 3(15) which defines "feasibility" as included in requirements regarding the promulgation of standards dealing with toxic substances. Feasibility should be defined as technologically feasible and economically feasible for the majority of employers based on currently available state of the art technology and prevailing economic conditions. Prohibit Interference In Issues More Appropriately Within the Jurisdiction of NLRB or EEOC Problem: become increasingly involved in areas more appropriately dealt with by employers and employees in their collective bargaining and equal employment Opportunity programs. Walkaround pay, rate retention, work refusal rules, and medical removal all transcend safety and health issues to have heavy labor?management relations overtones. regulatory expansionism has, in some areas, infringed upon employer and employee rights and usurped the jurisdictional prerogative of the National Labor Relations Board and the Equal Employment Opportunity Commission. Solution: Legislatively set clearer parameters for OSHA's regulatory powers. This can be accomplished by creating a new similar to proscription of OSHA's interference with worker compensation laws. By distinguishing OSHA's regulatory authority from that of the NLRB and EEOC, Congress can help assure that the Act is considered and administered first as a safety and health law, not as a labor law. Furthermore, such Congressional action would have the positive effects of helping prevent administrative agency overlap and regulatory overkill, and would help OSHA better perform its responsibilities by focusing the agency exclusively on a safety and health regulatory agenda. E) -20- Limit First Instance Penalties (ExcePt for Willful or Repeat Violations, or for Violations in Excess of a Numerical Cap) Problem: Solution: In the past, OSHA has often taken an adversary posture towards employers. To the extent that OSHA's approach has been punitive, rather than corrective, the agency has needlessly built up hostility and aggrava- tion between itself and the business community, often to the detriment of the underlying goals of helping assure worker protection. OSHA often assumes that the difference between a responsible employer and what would have been an irresponsible employer is the threat of a $200 penalty. But, as discussed earlier, the crime-and?punishment approach has not worked. Most employers and act in good faith to protect their workers, but most often it is not because of the heavy-handed OSHA policeman. In economic incentives alone, worker's compensation costs far 17/ outdistance OSHA penalties as an incentive to prevent workplace injuries. With limited positive utility, OSHA penalties more often realize their negative potential compromising OSHA's stature and credibility while creating resentment in the employer, particularly the employer at the small or medium?sized business. Toward the goals of making OSHA a more positive force in the workplace, more accepted by the average employer, and more successful at helping protect American workers, the Act should be amended to eliminate most first instance penalties. This would create a more productive atmosphere of collegiality between bureaucrat and businessman, would emphasize abatement of hazards rather than punishment of alleged offenders, and would recognize that most employers are acting in good faith and are committed to worker protection. Thus, OSHA would become more of a guiding hand to employers, pointing out potential hazards more as a consultant and educator than as a policing inspector. This process would also encourage prompt abatement and discourage litigation and the costly and time?consuming procedures of protracted legal challenges. According to Mary Jane Bolle, an analyst at the Library of Congress' ResearCh SerViCe, who has completed 1977 and 1981 economic analyses of OSHA, company expenditures for insurance and worker's compensation claims are more than six times as high as safety expenditures. -21- The non?penalty response to citations would only apply to first instance citations at worksites with good safety records that are inspected and found to have few violations. It would not apply to repeat violations, those workplaces that have experienced a high number of injuries in the past, or those workplaces which are found to have a high number of violations during the inspection. The only employers who would have benefits accrue to them as a result of this amendment would be those who are doing a gOOd job of protecting their employees and do not deserve to be treated as, or be presumed to be, a criminal. This can be accomplished by amending the 17 penalties section to combine 17(b) and serious and non?serious citation penalty provisions into a 17(b) provision providing for citations without penalty for most first instance violations. Such a provision would be particularly useful to small businesses, but of limited utility to larger businesses because of the violations cap. In this regard, "few" violations, to qualify for the penalty exemption should be defined as no more than ten violations found during the inspection. An additional requirement for penalty waiver should be that the violations are abated within the period set by the Secretary of Labor. Additional Solution: Provide for Dollar?for?Dollar Reduction of Penalties by Abatement Costs. For the same reaSons that an employer with a good safety record and less than 10 violations found during an inspection should be exempt from first instance citation penalties, penalties above the ten violatiog_ cap should be waived by the amount of compliance expenditures. OSHA is not a Federal collection agency and its purpose is not to feed the Federal coffers. Its purpose is to help assure worker protection. Toward this goal, providing in 17 for a dollar?for?dollar reduction of penalty amount by compliance costs encourages abatement and cooperation and discourages delay and litigation. It would also create a more positive and accepting employer View of OSHA and a stronger compliance?orientation in employers and inspectors alike. F) Limit Surprise Employee Complaint Inspections Problem: Employee participation in the workplace safety and health program and process is an integral and necessary function. Employee rights to notify compliance officials, without recrimination, of hazards in the workplace, is also a positive and appropriate provision of the Act. However, as discussed extensively at last year's oversight hearings and as indicated in the 1979 General Accounting Office (GAO) report on OSHA's response to employee complaints l2], this process has been the subject of continuing abuse and harassment and has been relatively fruitless in targeting and identifying true workplace hazards. Employee complaint inspections,?almost as numerous as general schedule inspections, result in far fewer violations being found per inspection. Ultimately, employee complaint inspections have resulted in a misallocation of OSHA's finite compliance resources. Nonetheless, the employee working first?hand in the workplace most often knows the job and the job's hazards better than anyone. Furthermore, the employee right to complain to OSHA of hazardous conditions, and remain anonymous, is also a right which must be preserved. But because the complaint process has been abused in the past for collective bargaining leverage; for harassment or revenge by disgruntled, disciplined, or dis- charged employees or ex?employees; or for competitive advantage by rival employers it is rife with problems and in many respects, counterproductive. OSHA has responded, under pressure from the GAO and other sources, by curtailing inspection responses to verbal employee complaints by allowing for notification to the employer of complained?about items which are not of critical severity with the opportunity for the employer to respond and satisfy OSHA that the complaint was spurious or that the complained?about hazard has been corrected. This is a positive step, 18/ Op Cit, fn. 2. The U.S. General Accounting Office's April, 1979 report Effective are OSHA's Complaint Procedures?," found that less than four percent of the complaint items were cited as serious violations, and for 80 percent of the reviewed complaints, no violations were found that related to the items listed in the complaints. OSHA has traditionally overreacted to employee complaints, particularly anonymous, informal complaints, and figures such as the ones included in the GAO report support the assertion that this is a major reason for OSHA's inability to impact on serious injury and illness rates, I and its past failure to embrace a viable targeting system for inspections. G) Solution: Problem: -23- evidences a more cooperative attitude, and is a more judicious mutual use of resources. However, this approach should be codified as part of the Act itself by amendment to and extended to include written complaints as well as oral complaints. Such an amendment would require OSHA to notify employers of all employee complaints in advance of inspection, with the prominent exception of those items complained about which suggest that an imminent hazard may exist in the workplace. In that instance, an immediate inspection response would be appropriate. Inspections would also ensue pursuant to other complaints, except those disregarded by OSHA as clearly frivolous, in the event the employer either does not respond or does not satisfy OSHA that the alleged violation does not exist. Provide for Increased Use of Performance Standards A major flaw in OSHA's past regulatory approach has been its inability to come to grips with what we refer to as "the realities of the workplace." OSHA has repeatedly issued standards which, in an idealistic sense, fare well on paper in a Washington office, but in a realistic sense, fail miserably once in practice on the assembly lines of our workplaces. A major cause is the rigid overspecification and inflexibility of many of OSHA's standards. Specification standards with mandatory methods of compliance often frustrate employers and employees alike, and can be counterPIOdUCtive to the overall objective of protecting workers. Because these standards often lack relevance to a particular work site, their enforcement can be useless and can polarize the regulator and the regulated. Zealous policing of standards which, when applied at a particular site, are inappropriate, detracts from industry's necessary safety and health efforts. OSHA did not, in its first decade, fully grasp the need for flexibility in its enforcement. Rigid design standards present a plethora of problems: specificity leaves subject area gaps; Standard-setting is slower; technology tends to be frozen; disparate work sites are arbitrarily and autocratically forced into one mold; smaller firms are disproportionately affected; and funds H) Solution: -24_ from what should be higher priority safety and health efforts are diverted. Performance standards would: allow industry to innovate new solutions to existing problems; provide for differences in industrial processes by encouraging industry to develop individual guidelines for compliance; allow rapid updating of guidelines and codes developed to meet the intent of the general standard; and reduce the costs of compliance. OSHA needs to adopt a performance?oriented approach to both its rule?making and enforcement (industry's compliance options). The bottom line is worker protection; OSHA must recognize and accept whatever means is used to achieve that end, and should continually focus on performance, not form. The Act in 6's Occupational Safety and Health Standards section should be amended to require the Secretary to develop standards with the maximum degree of performance language feasible, recognizing that a degree of specification may be appropriate and that specification as non- mandatory guidelines should be developed when possible (particularly as an aid to smaller businesses). Similarly, 9(a) of the Act's Citations section should be amended by Congress to offer the same degree of flexibility to employers for compliance purposes, as OSHA would be required for rule?making purposes. No citation for a violation of a standard or duty should issue to an employer who, by means other than those specified by the Secretary, provides a comparable degree of worker protection as would be afforded by strict compliance with the Secretary's specified means. Restrict the Present Overuse of the General Duty Clause Problem: The Act requires in the Section general duty clause that: "Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his g/ 29 U.S.C. a 654 -25- Legislative history verifies that the general duty clause was meant to be narrowly interpreted. In fact, the full Committee's report stated: "The general duty clause in this bill would not be a general substitute for reliance on standards, but would simply allow the Secretary of Labor to ensure the protection of employees who are working under special circumstances for which no standard has yet been adopted." 21/ The general duty clause was intended to be used infrequently for enforcement purposes and was not intended to serve as a mechanism for ad hoc standard?setting, shortcutting compliance officer responsibilities, or justifying inspections which would otherwise come up empty-handed- The marked increase in citations in recent years and inspector overreliance on this catchall clause for purposes of administra? tive convenience, frustrate many employers for whom compliance with thousands of existing OSHA standards seems insufficient and leads to costly and protracted legal challenges since extensive pre?trial OSHA discovery is often utilized in an attempt to establish that a violation existed. Solution: The current administration is considering administrative revisions in their enforcement policy which would help curtail misuse of the general duty clause. Redefinition of "recognized hazard" is imperative. Regional administrator review of all citations prior to issuance and a higher OSHA burden before issuance of health citations where litigation costs and discovery are extremely extensive are also positive steps. However, this is also an appropriate area for legislative action. Based on a clear expression of legislative history, and an even clearer record of misuse, Congress should amend to impose a higher burden on compliance officers before citation issuance and should amend 3 to define "recognized hazard" to require industry recognition or employer perception as well as common sense recognition. _gl/ S. Rept. 91?1282, 9lst Cong., 2d Sess., p. 10. I) J) -26- Provide for Clearer Guidelines and More Expedient Determinations Regarding State Program Certifications. Twenty?two states, Puerto Rico, and the Virgin Islands have state The Chamber Bram: plans under 18's requirements regarding state jurisdiction. has been a long?time advocate of state programs and states' rights regarding safety and health regulation enforcement. However, the last administration at OSHA established a policy and pattern of conduct which was unc00perative and discrediting for state programs despite the fact that state inspectors, on the average, conduct more inspections and issue more citations than their Federal counterparts. OSHA's inability and unwillingness to certify state plans in the past has been a result of political bias and is in direct contravention of the Act as viewed through its legislative history. Section 18 Solution: should be amended to expedite the evaluation and certification process and require OSHA to rule on certification of existing plans within twelve months of the effective date of the amendment. Detailed explanations of the reasons for, and justification of, decertifica? tion or certification denial should also be required. Provide for Reimbursement of Attorneys' Fees to Successful Employer? Litigants. Problem: A major factor in lack of credibility in the workplace is a common opinion held by many employers that OSHA cannot help them because it does not know what it is doing. So often employers are convinced of this because of the inexpertise of compliance officers and the non?hazardous nature of cited items. When OSHA cites employers for what employers perceive to be non?hazards, credibility is diminished, real hazard recognition to citations are more likely to ensue. That is evidenced by the high settlement is hindered, and challenges OSHA is citing for spurious "violations" rate gg/ and high loss rate in cases_g?/ by the Labor Department before the Occupational Safety and Health Review Commission. 22/ Currently more than 90 percent according to Department of Labor officials- 22/ More than 70 percent of fully?contested cases have resulted in at least partial respondent victory. . K) -27- OSHA must better identify workplace hazards and exercise more discretion in citing employers for alleged hazards. Solution: One way of ensuring a higher level of compliance officer responsibility and professionalism is increased accountability. This could be accomplished by requiring OSHA to reimburse the costs of liti? gation, including attorneys' fees, to all employers who successfully challenge OSHA citations. This would expand upon the Equal Access to Justice Act's attorneys' fees provision, expanding its applicability beyond small businesses and removing its requirement that employers prove that the government was unjustified in pursuing its case. This would help ensure more thorough and pragmatic examination of inspection results by OSHA before it issues citations. Greater OSHA selectivity and discretion would lend itself to more proficient hazard identification. Finally, employers would be given a fair opportunity to disprove unfair allegations, without sustaining the penalty of legal expenses. Employers with compelling cases may well believe they are 100 percent in the right, yet they sometimes refrain from contesting OSHA citations due to the prohibitive costs involved. They lack the resources to fight the Federal government, which they consider to economically overmatch them with its "deep pockets.? Often, the penalty assessed is less expensive than litigation, so employers, in effect, admit "guilt" no matter how innocent they believe they are. Reimbursement of litigation costs to those employers who win their contests would "even" the sides in cases where it is justified, and enhance the opportunity for employers, particularly small business employers, to gain their "day in court." Thus employers, innOCent of wrongdoing, would not be required to pay the proposed penalty, be subject to repeat citations, or be forced invest effort and finances into abate? ment of a non?hazard. Protect the Confidentiality of Employer Self?Audits Section 8 of the Act should be amended to protect the confidentiality of employer?generated safety or accident reports and safety or industrial hygiene self?audits and inspections, including medical reports and exposure data. Release of an individual employee's VII. -28_ medical or exposure records to that employee should be a recognized and protected right. However, requirements in excess of that create a myriad of harassment and abuse problems; have repercussions on trade secret, confidentiality, and property rights infringement; and inhibit employer initiative and innovation in the testing, auditing, and occupational safety and health research and development areas. L) Limit OSHA's Use of Ex Parte Warrants (Except in Imminent Hazard Situations) Finally, Congress should also consider amending Section 8 of the Act dealing with inspections to prevent abuse of the administrative search warrant procedures and preservation of the employer's right against unreasonable searches guaranteed by the Fourth Amendment and applied in an OSHA setting by the Supreme Court in Marshall v. Barlow's, Inc. gg/ OSHA should not be allowed to obtain a search_warrant in advance of entry denial by an employer, and an employer should be given notice and the right to appear at hearings before the local magistrate to determine whether a warrant is justified and should be issued. CONCLUSION In conclusion, the U.S. Chamber of Commerce remains fully committed to the goals of worker protection and employer responsibility to provide a safe and healthful working environment for employees. We also recognize the compelling and appropriate purposes of the Occupational Safety and Health Act itself, and the positive role to be played by the government in encouraging, advising, and enforcing safety and health regulations. However, we also recognize OSHA's ten?year record as one of disappointment and missed Opportunity. OSHA, despite its wholly mission, simply has not been the positive force in the workplace that it should have been and that its proponents at enactment predicted it would be. Despite some significant strides forward, OSHA, through a myriad of its own administrative, philOSOphical, managerial, and political problems, has yet to demonstrate a truly positive and significant impact in helping to protect the American worker. 436 U.S. 307 (1978) By contrast, we are greatly encouraged by developments within the current administation. The progress already achieved at OSHA, while only in the early stages, is most significant. We firmly support President Reagan and Assistant Secretary Auchter in their efforts to refocus and revitalize the Occupational Safety and Health Administration into a more effective, more pragmatic, more objective and more reasonable agency. While applauding these efforts for administrative reform, however, we also recognize and champion the need for significant legislative reforms as well. At a time of meaningful change and progress, the OSH Act is, in many respects, old and out?of?tune. Congress needs to readdress itself to the problems at OSHA and in the safety and health field. We critically need further Congressional expression of its intent and mandate to the American people regarding the safety and health of their working conditions. We hope that this hearing is a step toward legislative reform and that for the sake of all affected parties, this hearing and subsequent Congressional attention and activity is helpful in making OSHA more effECtiVe in accomplishing its goal. We thank the Labor and Human Resources Committee, and its subcommittees, for scheduling this hearing, and continuing their interest in reviewing OSHA's performance and furthering the goal of worker protection. 1 Capital Expenditures for Safety and Health Ey American Industry-22f YEAR EXPENDITURE (in Billions) 1972 3.279 1973 3.616 1974 4.403 1975 3.842 1976 3.415 1977 4.291 1978 6.645 1979 4.317 1980 4.128 9?year total 537.936 Projected 1981 5.058 10?year total $42.994 25/ According to the McGraW/Hill Annual Surveys of Employee Safety and Health Expenditures by American industry (last issued: June, 1981). -31? APPENDIX II OSHA BUDGETS 811995.11 197131/ 15,189,000 1972 35,884,000 1973 69,373,000 1974 70,408,000 1975 102,006,000 1976 117,181,000 1977 130,333,000 1973 139,070,000 1979 173,034,000 1980 186,394,000 1981 209,157,000 11 year total $1,248,029,000 Increase since 1972 (OSHA's first full year of operations) 433% 26/ Based on U.S. Government Budgets, FY 1971?1981; OSHA Office of Information 21/ Partial year, the Act was signed into law April 28, 1971. -32- APPENDIX WORKER SERIOUS INJURY ILLNESS AND FATALITY YEAR LOST nonrig/ LOST 30/ TOTAL 31/ DAY PLACE 1972 3.3 47.7 gg/ 1973 3.4 53.3 5,700 1974 3.5 54.6 5,850 1975 3.3 56.1 5,160 1976 60.5 4,480 1977 3.8 61.6 5,560 1978 4.1 63.5 5,490 em 5.850 8?year change 30.3% 41.9% 2.6% change during the last 22.9% 12.7% 30.6% administration a7 29/ 30/ According to the OSHA.Office of Occupational Safety and Health Statistics, U.S. Department of Labor. This table shows the number and severity rates for serious (causing loss of one or more workdays off?the?job) injuries and ill? nesses and workplace fatalities -- the most critical and significant indiCia of workplace safety and health since OSHA's inception. Minor injuries and illnesses (nonfatal cases without lost workdays) decreased substantially both in the 70's and during the past administration, but are the least reliable classification of statistics, were subject to early year overreporting by employers (inclusion of first aid cases), and are logically the classification OSHA will have the least impact on since this type of injury is more likely to be a pure accident in the traditional sense of the word, and is less likely to be caused by conditions discoverable by OSHA inspections. Per 200,000 hours of exposure (in theory, per 100 full-time workers). Ibid. These are absolute figures, not rates, Safety and Health Statistics estimates of workplace 10 or fewer employees. See fn. 7. Workplace fatality statistics were first recorded by OSHA in 1973, unlike other OSHA statistics which generally go back for an additional year to 1972. and include the OSHA Office of Occupational fatalities for employers of