ACC and the law of unintended consequences

(First published in the Nelson Mail and Manawatu Standard, September 9.)

A letter in last week’s Listener magazine offered an interesting slant on the workplace safety debate.

The writer was a New Zealand geologist who had worked in Australia. He had gone there convinced, as most of us probably are, of the virtues of our no-fault accident compensation system.

He thought ACC was clearly superior to the Australian alternative, where people injured in workplace mishaps (or in car accidents, or even as the result of a fall on a slippery supermarket floor) can sue for damages. 

That used to be the way in New Zealand too. Personal injury cases were a profitable area of practice for lawyers until the well dried up with the introduction of the accident compensation scheme in 1974.

Under ACC, the state picked up the tab for all work and non-work injuries, regardless of who (if anyone) was to blame.

At first it seemed a bizarre notion that a burglar who accidentally slashed his arm while breaking into a house should be entitled, courtesy of his law-abiding fellow-citizens, to free medical treatment and weekly earnings while he recovered to steal again.

But we put those misgivings aside because the new regime seemed preferable to one where compensation hinged on being able to prove negligence, which involved hiring a lawyer.

In hindsight, ACC can be seen as the high-water mark of socialism – or, if you like, collectivism – in New Zealand.

Effectively, it was a state takeover of turf previously occupied by lawyers and insurance companies. But more than that, it took fault out of the equation.

It made us all collectively responsible for everyone else’s folly, whether it’s a company with lax safety standards or a snowboarder testing his skills on a slope strewn with rocks.

To put it another way, it absolved people of full personal responsibility for the consequences of their actions. It meant that if we fell over, the state could be counted on to pick us up and kiss us better.

This brings us back to the New Zealand geologist in Australia. He noticed that Australian employers were extremely risk-averse when it came to health and safety – more so, by implication, than bosses here.

As a supervisor, he was required to ensure not only that workers wore all the usual safety equipment, but long-sleeved shirts and long trousers as well, for fear that the boss might be held liable if someone got skin cancer.

Contrast that with a recent New Zealand court case in which a forestry worker wasn’t even wearing a high-vis vest when trees were being felled in the pre-dawn darkness. A workmate didn’t see him, and he was killed by a falling log.

The geologist wrote that he had been incredulous on reading about the infamously slack safety standards at the Pike River coal mine. “Our no-fault ACC system,” he concluded, “seems to mean just that.”

In other words, if I interpreted his letter correctly, no-fault compensation can serve as a licence for employers to disregard their obligations when it comes to workers’ safety.

Did anyone anticipate this at the time ACC was introduced? I don’t know. But it wouldn’t be the first time well-intentioned legislation has led to unintended and sometimes disastrous consequences. History is littered with examples.

The domestic purposes benefit was brought in to help struggling solo parents – an entirely laudable aim. It seems no one imagined that it would incentivise teenagers to have children at the taxpayers’ expense.

The Privacy Act was passed to protect personal information. Now it’s used to justify schools arranging abortions for girls without having to tell their parents.

Bike helmets were made compulsory to prevent cyclists suffering brain injury. Result? Women and teenagers stopped riding bikes because helmets were considered uncool or just too inconvenient.

In the United States, idealistic zealots successfully campaigned in the early 20^th century for Prohibition – an event that gave birth to organised crime as gangsters exploited demand for illicit liquor. It was the best thing that ever happened to the Mafia.

The European Union arose out of a desire to ensure that the countries of Europe would never again go to war with each other, but its architects overlooked underlying economic, political and cultural differences that are now threatening to pull the union apart.

Likewise, when the 1985 Schengen Treaty created passport-free travel between 26 European countries, no one anticipated that Europe would be swamped with refugees from North Africa and the Middle East.

Often these changes are championed by idealists from the political left. Their intentions may be good but their faith in the ability of laws to control human behaviour is often misplaced.

Of course we can’t use fear of unforeseen consequences as an excuse for doing nothing. But if the geologist’s perception is correct, it’s possible that the accident compensation scheme perversely contributed to the culture of workplace complacency highlighted in 2013 by the government’s Independent Taskforce on Workplace Health and Safety.

I’m sure that wasn’t the outcome the ACC’s creators envisaged.

Workplace safety debate reduced to farce

(First published in the Nelson Mail and Manawatu Standard, August 26.)

Opportunistic grandstanding on one side, incompetent political management on the other. That was my take on last week’s furore over workplace health and safety legislation.

It’s probably not necessary, but let’s revisit the background to this stoush.

Twenty-nine miners died in the Pike River mine explosion in 2010. A subsequent Royal Commission exposed shocking deficiencies in the way the mine was managed.

Warnings of dangerous methane levels went unheeded and there was no second exit from the mine. Production took priority over safety and monitoring by the Department of Labour was scandalously slack.

Following the commission’s damning report, the government set up an independent taskforce to review workplace health and safety more generally. It found that safety standards, monitoring and accountability were lax across the board in New Zealand industry and recommended a comprehensive rewrite of workplace health and safety laws.

As if to underline the message, in the year the taskforce report came out (2013), 10 men died in forestry accidents.

Out of that came the Health and Safety Reform Bill. Everyone supported the legislation – not just unions, but the government and business groups too. Pike River seemed to have shocked all the players into a rare state of accord.

But last month something unexpected happened. The National Party, having previously given the impression of being fully committed to workplace safety reform, watered down what the Labour Party and the unions saw as a key provision.

Under the amended bill, businesses with fewer than 20 employees in industries deemed to be lower-risk were to be excluded from an obligation to have elected health and safety representatives.

Why National had second thoughts isn’t entirely clear. Most political commentators put it down to last-minute lobbying by farming interests, worried that the new law would impose too great a burden.

Others said it was an act of defiance by stroppy National backbenchers and pointed the finger at disaffected former Cabinet ministers Judith Collins and Maurice Williamson.

The Left worked itself into a fine old lather, angrily protesting that the change meant the new law would be worse than the one it replaced.

You could understand why unions felt betrayed by the government’s back-pedalling, but that was a wild overstatement.

Certainly the bill was weakened, especially when you consider that 97 per cent of workplaces employ fewer than 20 people. But the majority of those workplaces are not high-risk, so the outcry was a bit theatrical. So was the carefully orchestrated presence at Parliament of widows and families bereaved by workplace accidents.

It was only to be expected that the unions would extract maximum leverage from the situation. After all, they don’t get many opportunities these days to put runs on the board. But there were moments when I felt those widows and families were too blatantly being used in pursuit of a political agenda.

As Workplace Safety Minister Michael Woodhouse pointed out, larger workplaces – which, although relatively few in number, employ 75 per cent of the labour force – will still be subject to the requirement to have elected health and safety representatives. And all the other provisions of the legislation will still apply to smaller workplaces, so they’re not “off the hook”, in the minister’s words.

It was on the question of risk that the workplace safety debate descended to the level of farce. National’s support parties, sensing an opportunity to assert themselves, refused to simply wave the amended bill through. They wanted more certainty on which industries would be defined as high-risk and therefore required to have elected health and safety representatives, even in small workplaces.

The government appeared not to have anticipated that complication and was forced into last-minute negotiations. In its haste, it adopted existing, arbitrary classifications of risk that were riddled with bizarre anomalies, much to the media’s delight. 

That was how worm farms and mini-golf ended up being defined as high-risk while livestock farming conveniently (from National’s perspective) escaped the net. A smarter minister might have seen the potential for embarrassment in advance and had a Plan B ready, but Woodhouse doesn’t give the impression of being the sharpest knife in the drawer.

In the end, I don’t think anyone emerged from this imbroglio with a lot of credit. The government not only appeared to have pandered to special interests, but looked incompetent politically. A case of third term-itis, perhaps.

For their part, opposition parties and the unions overplayed their hand, accusing the government of putting profits before people and failing to acknowledge that even in its slightly watered-down form, workers should be much safer under the new regime than the old. And in all the fuss over the "watered-down" provision, no one explained how a system of elected health and safety representatives would work where farms are run by only one or two people, sometimes father and son or husband and wife. 

Some of the news media deserve a slap too, for playing heavily on the emotional scars of bereaved Pike River and forestry families when the debate had moved on and their experiences, painful though they undoubtedly were,  were no longer strictly relevant.