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Due Diligence - A proactive and powerful management tool

Posted by Richard Forster on 8 November 2016

There is a greater importance being placed on culture and leadership in the workplace with regards to managing health and safety. The need for senior management to demonstrate leadership with regards to the corporate safety agenda is critical to positive safety outcomes. It is senior management that establish the conditions for a safe working environment and culture. A way of demonstrating leadership is known as due diligence.

Due diligence is a positive duty under the applicable Health and Safety legislation that is placed on an 'officer' of a company. An officer is a senior executive who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business or undertaking. The term 'officer' has the same definition as it has in the Corporation Act 2001.

Work Health and Safety legislation sets up a structure for due diligence, although the concepts and expectations are not new. The due diligence concept is also part of an ongoing discussion in Victoria and Western Australia.

An officer would be expected to exercise due diligence to make sure that the company is meeting its health and safety obligations to provide a safe and healthy workplace. An officer can be prosecuted for a failure to comply with due diligence obligations although a volunteer officer cannot be prosecuted.

Due diligence obligations are designed to make sure officers take reasonable steps to ensure that the company or person(s) conducting a business or undertaking (PCBU) uses and applies appropriate resources, policies, procedures and health and safety practices.

To exercise due diligence, an officer must, as a minimum, take reasonable steps to:

a) Acquire and keep up-to-date knowledge of health and safety matters;
b) Gain an understanding of the nature of the operations of the company and generally of the hazards and risks associated with those operations;
c) Ensure that the company or PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the business or undertaking;
d) Ensure that the company or PCBU has appropriate resources for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information;
e) Ensure that the company or PCBU has in place and implements processes for complying with any duty or obligation of the company under the applicable legislation; and
f) Verify the provision and use of the resources and processes.

Due diligence should be identified and implemented as a proactive and powerful management tool that may assist with improving the culture of an organisation and drive safer work practices.

Officers need to make themselves aware of changes to legislation and developments with case law, as well as any relevant guidance material produced by the regulators.

HAZCON has the resources and tools to assist officers with due diligence in a range of ways, such as:

  • Understanding the requirements of due diligence;
  • Auditing to ensure safe practices, procedures and controls are in place that are specific to the hazards in your workplace that either meet or exceed the requirements set out in health and safety legislationincluding relevant Codes;
  • Providing health and safety training to supervisors, managers and workers; and
  • Monitoring health and safety programs on a regular basis.

If you require any further information relating to health and safety aspects of due diligence, leadership and culture then please contact HAZCON on 1800 429 266 or hazcon@hazcon.com.au

Author: Richard Forster
Tags: Richard Forster

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