UNDER THE COMMISSIONS OF INQUIRY ACT 1908 THE ROYAL COMMISSION ON THE PIKE RIVER COAL MINE TRAGEDY

Transcription

1 UNDER THE COMMISSIONS OF INQUIRY ACT 1908 IN THE MATTER OF THE ROYAL COMMISSION ON THE PIKE RIVER COAL MINE TRAGEDY PHASE FOUR PAPER PREPARED BY THE DEPARTMENT OF LABOUR 16 March 2012 Crown Law Te Tari Ture o te Karauna PO Box 2858 WELLINGTON 6140 Tel: Fax: Contact Person: C. Mander cameron.mander@crownlaw.govt.nz

2 INTRODUCTION 1 EXECUTIVE SUMMARY 1 Context 1 Suggested approaches to the regulation of underground coal mining in New Zealand 2 The three pillars framework is an internationally recognised approach to regulating health and safety in workplaces 2 A different approach is required to regulating low probability, high consequence health and safety risks 3 Changes proposed for employer/operator duties 4 Changes proposed for worker involvement and supportive cultures 6 Changes proposed for an active and engaged regulator 6 Regulations under the HSE Act are preferred to a new Mining Act 7 Harmonisation of New Zealand s mining regulation with Australia could be considered in the longer term 7 EXPERT REPORTS COMMISSIONED BY THE DEPARTMENT 8 MINING REGULATION AND RECOGNISED PRACTICES COMPARATORS 10 Response to Questions A1 and A2 Comparator countries or states 10 Response to Question A3: Particular features of the underground coal mining sector in New Zealand which need to be taken into account in making a comparative evaluation against overseas regimes 10 MINING REGULATION AND RECOGNISED PRACTICES - THE NATURE AND FORM OF REGULATORY ARRANGEMENTS, PART A: RESPONSES TO QUESTIONS A4-A9 11 Response to question A4 Aside from the HSE Act, what additional regulatory arrangements are needed in relation to the mining industry? 11 The general approach to managing workplace health and safety risks 11 A differentiated approach is required for underground mining 12 Requirment to provide a draft principal hazard management plan before operations commence 13 Ongoing health and safety management processes 14 Tighter controls on specific hazards 15 Questions A5a, A5b - At what level and when is prescriptive regulation appropriate? What type of regulatory arrangements (regulations, approved codes of practice, codes of practice and industry standards) are most appropriate? 16 Prescription at the level of regulations 16 Following international best practice 17 Response to Questions A5c and A5d should a safety case requirement or components thereof be included as an aspect of the mining industry regulatory arrangements? If so, what form of requirement is appropriate and should the safety case be subject to review, or approval, by the regulator or an independent third party? 17 Key components of a safety case 17 Requirement to provide a draft principal hazard management plan before operations commence 19 Response to Question A6 Do the employee participation provisions in Part 2A of the HSE Act require improvement and, if so, in what respects? 20 Worker involvement and supportive workplace health and safety culture 20

3 Proposals to strengthen worker participation 21 Response to Question A7(a) Who should have primary responsibility for establishing and updating the mining industry regulatory requirements for occupational health and safety? 21 Question A8 Accepting the need for tripartite involvement, which bodies or individuals should participate in the drafting and review of the mining industry regulatory arrangements and how can this best be achieved? 22 Question A9 Generally, would there be advantages in greater co-operation, co-ordination and sharing of experience with Australia and its States in relation to the regulation of the mining industry? If so, how might a closer relationship be achieved? Would there be any disadvantages? 22 The potential for harmonising with Australia 22 Aligning with the larger mining jurisdictions 23 Additional matters for consideration in Phase 4 24 Legislative basis and funding of mines rescue services 24 MINING REGULATION AND RECOGNISED PRACTICES - THE NATURE AND FORM OF REGULATORY ARRANGEMENTS, PART B: OVERVIEW OF KEY PROPOSALS AND SUPPORTING ANALYSIS AND COMMENTARY 26 OVERVIEW OF KEY PROPOSALS 26 Analysis/commentary in relation to response to Question A4 additional regulatory arrangements in relation to the mining industry 29 Documented health and safety management systems 29 Issues for consideration in the adoption of any formal management system 32 Mandatory emergency preparedness 34 Content of any new regulatory requirements. 36 Increased disclosure of mine plans, hazards and safety critical incidents to the inspectorate 37 Availability of mine plans 38 Notification of safety critical incidents or conditions 38 Competency requirements for mine management and others 40 Ventilation officer 42 Site Senior Executive 42 Creating new roles to represent worker interests 43 Stricter controls on the specific hazards of coal mining 44 Indicative evidence from the Department s investigation report 44 Ventilation 45 Methane levels, monitoring and drainage 45 Spontaneous combustion 46 Inundation 46 Strata control 46 Electrical hazards 46 Access control/emergency egress 46 Emergency preparedness 47 Other hazards as appropriate 47 Clarifying regulations by removing the all practicable steps standard from regulations where appropriate 47 Supporting analysis/commentary in relation to response to Question A5b - The place of guidance and approved codes of practice 48 When guidance is to be preferred to regulations 48 How guidance is best developed and implemented 49

4 Analysis/commentary in relation to response to Question A5c safety case requirements 50 Context 50 Proposed features of assessment requirement 53 Supporting analysis/commentary in relation to response to Question A6 - Improving employee participation in the mining sector 54 The legislation provides an adequate basis for worker participation in the sector but needs to be supplemented 54 Worker health and safety representatives 55 Contractors and their employees 57 Strengthening tripartism to better support standards development and employee participation in the mining sector 57 Interaction between mining regulation and recognised practices and other (including conservation and environmental) legal requirements 59 Response to Question B1 How do overseas jurisdictions manage the interface between mining and other legal requirements (including conservation and environmental) with reference to: (a) the permitting of prospecting, exploration and mining activity and (b) occupational safety and health. 59 Response to Question B2 should applicants for prospecting, exploration and mining permits be assessed as to their capacity (financial, managerial and technical) to develop the mine proposal and do so in a safe manner? 59 Response to Question B3 If so, how should this assessment be carried out, by whom and should there be sharing of information between regulators? 59 Improving enforcement agencies and others access to and use of mine plans and consenting documents 60 RESOURCING AND ADMINISTRATION OF THE REGULATORS OF MINING LAW AND PRACTICE 60 Response to Question C1 Are there overseas jurisdictions, other than those used for the mining regulation and recognised practices comparison which should be used in the comparative assessment of the New Zealand regulator? What are the significant features of these overseas regulatory agencies? 60 Response to Question C2 - Is the concept of a High Hazards Unit announced in August 2011 to provide health and safety regulatory services to the extractives, geothermal, and petroleum sectors supported; and are there views concerning: (a) The funding of the Unit? (b) The organisational structure? (c) Any other aspects of this development? 62 Context 62 Improving the qualifications, conditions and support structures for mining health and safety inspectors 64 Powers attached to the position of Chief Mines Inspector 65 Support for establishment of the High Hazards Unit 65 a. The funding of the Unit 67 Reviewing the funding level and mechanism for the delivery of health and safety inspection and advisory service for the high hazard sectors 67 The potential for sector-based funding for the High Hazards Unit 68 b. The organisational structure 68 c. Other aspects of this development 69 Response to Question C3 - What are the required features of a modern and effective regulator of the New Zealand mining industry including its: (a) Position or situation (Unit in a department, stand alone, etc.)? (b) Organisational structure, personnel, technical expertise, and training? (c) Financial resourcing and the source of such funding? (d) Key relationships with industry, unions, employees, contractors, industry associations and overseas agencies? (e) Operational role (balance between advice, compliance, and

5 enforcement) and operational methods)? (f) Policy role and responsibilities? (g) Involvement in search, rescue, and recovery operations? 69 a. Position or situation (Unit in a department, stand alone, etc.)? 69 b. Organisational structure, personnel, technical expertise, and training? 70 c. Financial resourcing and the source of such funding? 72 d. Key relationships with industry, unions, employees, contractors, industry associations and overseas agencies? 72 e.operational role (balance between advice, compliance, and enforcement) and operational methods)? 74 f. Policy role and responsibilities? 75 g. Involvement in search, rescue, and recovery operations? 76 BIBLIOGRAPHY 79 APPENDIX 1: COMPARISON OF NEW ZEALAND S OVERALL WORKPLACE HEALTH AND SAFETY PERFORMANCE 81

6 1 INTRODUCTION 1. This Phase 4 paper has been prepared by the Department of Labour ( Department ) for Phase 4 of the Royal Commission of Inquiry. The paper includes responses to the Phase 4 issues ( Issues ) outlined in the Commission s List of Issues dated 28 April 2011 and the questions ( Questions ) outlined in the Commission s Minute no.10 dated 22 December 2011, to the extent relevant to the regulatory role performed by the Department. 2. As the preparation of this paper was well advanced prior to the publication of Minute No.10, the structure of the paper does not strictly follow the order of Minute No.10. Additional issues to those outlined in Minute No.10 are also addressed. EXECUTIVE SUMMARY 3. This summary describes, in brief, the key elements of the Department s views on regulatory structures and approaches for the underground coal mining industry in the future. 4. The summary is supported by more detailed discussion of each issue in the responses to the specific questions posed by the Royal Commission. Context 5. The Department s Phase 4 paper is its policy and operational view of a future state for the regulation of underground coal mining in New Zealand. 6. The Department s view should be seen in the context of the ongoing development of mining regulation in overseas jurisdictions and reflects expert views on what is current international best practice, the findings of the Department s investigation into the practices at Pike River Mine and expert policy and operational input from within the Department. The Department has drawn particularly on the work of Professor Michael Quinlan who was commissioned by the Department to provide reports to the Royal Commission, as described further below. 7. The tragic events at Pike River (and previous mining tragedies) demonstrated that despite the small size of the industry in New Zealand, catastrophic events do occur. The Department s proposals are aimed at mitigating the likelihood of such an event happening again.

7 2 8. The Department has already instituted one significant change in its operations the establishment of the High Hazards Unit ( Unit ) with responsibilities in the extractives and petroleum/geothermal industries. The Unit significantly expands the Department s capability and capacity to undertake its regulatory role, and it implements a more clearly differentiated regulatory approach to high hazard sectors compared with others. It is structured in a manner that will allow it to facilitate Government decisions on recommendations from the Royal Commission. 9. The underground coal mining sector in New Zealand is very small,technically demanding by international standards and is dominated by one large operator. Industry data provided in the Ministry of Economic Development s ( MED ) Phase 4 Paper 1 shows clearly that the coal mining industry is, and will likely continue to be, a relatively small part of New Zealand s economy. New Zealand also sits alongside Australia and competes for mining expertise in a broader trans-tasman labour market, although its production of black coal is 1% of that of Australia. 10. This means that the Department s proposals need to support health and safety management systems and practices in the sector while allowing both operators and the Department to take advantage of the more developed infrastructure in the much larger Australian mining jurisdictions, and recognising other challenges for New Zealand that go with that. The Department therefore proposes an approach that is broadly consistent with the Australian mining states, while based in regulations made under the Health and Safety in Employment Act 1992 (the HSE Act). Suggested approaches to the regulation of underground coal mining in New Zealand The three pillars framework is an internationally recognised approach to regulating health and safety in workplaces 11. The framework of three pillars of support for workplace health and safety employer/operator duties, worker involvement and supportive cultures, and an active and engaged regulator, is an internationally recognised approach. 12. This approach (which in some jurisdictions and in the literature is described as tripartism ) reflects international best practice; it underpins the Health and Safety in Employment Act 1992 (HSE Act) and amendments; and informs the content and 1 MED

8 3 approach of International Labour Organisation Occupational Health and Safety Convention No 155, which New Zealand has ratified The Department proposes strengthening the framework as it applies to New Zealand mining regulation to bring it closer to international best practice (as identified by Professor Quinlan and others). 14. Using the material referred to above, and subject to any other issues that may be identified by the Royal Commission, the Department has identified key issues surrounding the current approach to mining regulation in New Zealand as: 14.1 a lack of consistency for operators on processes for managing the specific hazards of the sector (including how to involve workers in these processes); 14.2 incompleteness and uncertainty on the standards and requirements applying to particular workplace hazards such as methane, electricity, and strata control; 14.3 extensive use of contractors in the industry with resulting uncertainty of accountabilities; and 14.4 lack of clarity as to the role of the regulator. 15. The Department sees these as the significant issues that need addressing in changes to the regulatory framework. A different approach is required to regulating low probability, high consequence health and safety risks 16. In general, the Department supports the use of performance based regulation in workplaces this general approach allows employers and employees to find appropriate (context specific) approaches to managing health and safety risks in workplaces and is consistent with international best practice. 17. However, the Department acknowledges that the performance based approach needs to be complemented by a differentiated approach to regulation that is warranted for industries, such as underground coal mining, with the potential for low probability, 2 See Department of Labour Tier 2 paper, paras DOL /64-64

9 4 high consequence failure. In such cases, it is better to rely more heavily on prescriptive regulation to provide the assurance that key risks are being managed well. 18. The Department s Phase 4 paper proposes strengthening the requirements for underground mines contained in regulations made under the HSE Act. This would involve substantive review of the Health and Safety in Employment (Mining Administration Regulations) 1996 ( HSE (Mining Administration) Regulations ) and the Health and Safety in Employment (Mining Underground) Regulations 1999 ( HSE (Mining Underground) Regulations ). The proposed changes are summarised in the table below. They are in support of administrative changes already underway with the establishment of the High Hazards Unit within the Labour Group. 19. The changes proposed reflect international best practice and, in general, involve either: 19.1 tighter process regulation of health and safety systems in mines; or 19.2 more tightly prescribed standards of competency, and controls on key risks. 20. The Department sets out in this paper a range of potential changes. Where the Department has been able to form a clear view as to implementation of a particular proposal, this is indicated. A number of the potential changes would, in the Department s view, merit further consideration by the Commission, and are set out here to inform such consideration. Changes proposed for employer/operator duties 21. The Department proposes that the Royal Commission give consideration to a range of new requirements for coal mine operators, including: 21.1 A new requirement that the operators of proposed underground mines provide draft principal hazard management plans for identified hazards i.e. an outline of how they intend to manage key hazards (such as methane, strata control, spontaneous combustion) for the regulator to assess before operations begin. The Department considers this will allow the High Hazard Unit to engage with proposed operators and discuss approaches to managing principal hazards before operations commence. In the Department s view, it

10 5 will complement proposed changes to permit approval processes 3 under the Crown Minerals Act 1991 ( CMA ); 21.2 Documented health and safety management systems once mining commences, consistent with practice in the Australian mining states and requiring operators to take a consistent approach to the management of hazards and develop systems to address them. The Department proposes a requirement for underground mine operators to appoint a site senior executive responsible for the maintenance of these and other key safety functions; 21.3 Emergency preparedness requirements including making arrangements in advance of incidents by training workers, completing drills, and liaising with the mines rescue and other emergency services and the inspectorate before any emergency; 21.4 Stricter controls on specific mining hazards such as methane, strata control, ventilation, inundation, etc. This includes a change away from the all practicable steps in the regulations, to make requirements clearer for operators and others. 22. In suggesting the provision of draft principal hazard management plans before operations begin, the Department is not proposing an ongoing safety case regime for underground mines (as is required in the offshore petroleum industry). The latter approach would be novel for the coal mining industry and is not used in the Australian or United Kingdom mining jurisdictions. The Department understands that this reflects a concern that a safety case approach leads to a periodic assessment of risks and their management, whereas coal mining requires a more dynamic and active engagement between the operator and the regulator. The Department has therefore used the concept of the draft principal hazard management plan rather than safety case, to reflect the intended active and dynamic relationship. Additionally, a safety case requirement would potentially replicate requirements for other ongoing health and safety management processes which are proposed in the Department s Phase 4 paper. 3 Revew of the Crown Minerals Act 1991 Regime Discussion Paper, March 2012, Ministry of Economic Development MED

11 6 Changes proposed for worker involvement and supportive cultures 23. The Department supports increased emphasis on encouraging worker participation in the underground mining industry, including clarification of roles and responsibilities for health and safety representatives and the involvement of employees (and contractors and their employees) in the development and maintenance of health and safety management systems. 24. The Department is not proposing regulatory or legislative change in support of employee participation processes because its view is that effective employee participation processes can, and should, be achieved by mine operators within the HSE Act s existing requirements. 25. The Department proposes developing an approved code of practice that would strengthen worker participation in health and safety management. The Department also proposes introducing a competency requirement, at an appropriate level, for employee health and safety representatives appointed for underground mines. With reference to establishing a role of check inspector for underground mines, the Department s view is that such a role could be performed within the HSE Act s existing employee participation provisions. Changes proposed for an active and engaged regulator 26. In the Department s view, proposed regulatory changes need to be seen alongside the changes already brought about through the establishment of the High Hazard Unit. These will improve inspectorate capability and resourcing, and lead to a more proactive stance by the Department through increased ex-ante auditing and inspection and more involvement with key hazard management processes. 27. The Department therefore proposes increased regulator involvement at all stages of the development and operation of underground mines. This could be facilitated through the High Hazard Unit: 27.1 actively being involved with MED to assess and review permit applications under the CMA; 27.2 assessing draft principal hazard management plans under HSE regulatory requirements before operations commence;

12 ensuring operators meet requirements to maintain auditable health and safety (including principal hazard) management systems; and 27.4 working with new roles for site senior executives and ventilation officers and trained employee health and safety representatives for underground mines. 28. The Department is reviewing the funding level and basis on which inspection services are provided through the High Hazard Unit and welcomes the Royal Commission s consideration of the suitability or otherwise of sector based funding for the unit. Regulations under the HSE Act are preferred to a new Mining Act 29. The Department proposes that new requirements are implemented via a change to the HSE (Mining Administration) Regulations and the HSE (Mining Underground) Regulations, rather than a new Mining Act because the Department considers: 29.1 Section 21 of the HSE Act will support the proposed changes; 29.2 The amount of detail required is better suited to regulations than legislation; and 29.3 Regulations provide a more flexible means of updating requirements and maintaining consistency and/or alignment with Australian or other regimes. Harmonisation of New Zealand s mining regulation with Australia could be considered in the longer term 30. The Department has considered whether, in light of its very small underground coal mining sector, New Zealand has the critical mass to sustainably support the development and maintenance of best practice coal mining regulation, or whether New Zealand should look to adopt Australian mining regulation. The Department considers the potential adoption of Australian mining regulation to have merit, and should be investigated further. However, there are significant issues that make an immediate harmonisation with Australian regulation unfeasible, including: 30.1 Harmonisation processes are time consuming, and can be relatively costly on a small scale; 30.2 The Australian jurisdictions are themselves undergoing an extensive harmonisation process at the level of their national health and safety

13 8 regulatory framework, and among the three key mining states and these exercises are incomplete. 31. The Department therefore proposes that immediate changes to New Zealand s mining regulation take effect through revision of the New Zealand regulations, and starting an active and immediate engagement with the Australian jurisdictions with a view to developing a more harmonised trans-tasman mining regime. In the meantime, an incremental introduction of the best of the regulatory approaches from the Australian jurisdictions will produce a better outcome for New Zealand s underground coal mining industry in the near-term. EXPERT REPORTS COMMISSIONED BY THE DEPARTMENT 32. The Department commissioned independent research for consideration by the Royal Commission during phase 4 of its inquiry. As a result, three reports were prepared by Professor Michael Quinlan of the School of Organisation and Management, University of New South Wales ( Quinlan Reports ). Professor Quinlan, who also holds honorary and adjunct chairs at the Universities of Sydney and Middlesex, is an acknowledged expert in the area of mining health and safety regulation. He has written extensively on the subject and advised the Tasmanian Government in the aftermath of the Beaconsfield Mine collapse. 33. The three reports prepared by Professor Quinlan were filed with the Royal Commission on 22 December 2011 with summation references DOL , DOL and DOL The reports comprise the following: 33.1 Report comparing mine health and safety regulation in New Zealand with other countries ( First Report ) DOL ; 33.2 Survey report reviewing evidence from high hazard incidents and matters related to regulation in underground mining ( Second Report ) DOL ; 33.3 Analysis report reviewing evidence to assess whether the conclusions and recommendations of the mine safety review are still relevant and changes in regulatory framework the Royal Commission might consider ( Third Report ) DOL

14 9 34. The Department commissioned the Quinlan reports in response to Issues , which in turn respond to item (h) in the Royal Commission s terms of reference. The Quinlan reports deal exclusively with health and safety regulation. 35. Professor Quinlan s First Report [DOL ] provides a detailed international comparison covering most of the issues described in the Royal Commission s List of Issues with respect to health and safety regulation in the most relevant countries. 4 It includes a comparative evaluation and draws broad conclusions on how the New Zealand regulatory regime compares with those overseas. 36. Professor Quinlan s Second Report [DOL ] surveys recent international developments in mining health and safety legislation in response to major accidents and other influences. It summarises recent trends and relates these to the New Zealand regulatory framework. As such the Second Report most closely addresses Issue proposals for change in the future direction of regulatory requirements and recognised practices. 37. The Third Report [DOL ] reviews the policy decisions taken during the policy review in the light of the first two reports. As such, it goes beyond the Royal Commission s list of issues, but it provides a convenient summary and conclusion of international practice, recent developments, and makes some recommendations for New Zealand. 38. The Department has been impressed by the quality and thoroughness of Professor Quinlan s work and submits that the Quinlan reports will make a valuable contribution to the Royal Commission s inquiry. 39. The Quinlan reports are substantial and together describe the regulatory frameworks in place for mining health and safety internationally, outline the shape of change currently underway and reference these against the current New Zealand regulation. 40. Professor Quinlan s conclusions are that the current New Zealand regulatory framework is broadly consistent and fit for purpose with respect to other comparable jurisdictions, but that there are areas where the regime could be strengthened to move it 4 The United Kingdom, the United States of America, Australia, Canada, South Africa and Sweden First Report, para 2, DOL /3

15 10 closer to best regulatory practice. The Quinlan Reports provide some detail on these recommended areas of improvement. The Department has used the Quinlan Reports as a basis for preparing its own submissions and recommendations for Phase 4 of the inquiry as set out in this paper. MINING REGULATION AND RECOGNISED PRACTICES COMPARATORS Response to Questions A1 and A2 Comparator countries or states 41. Subject to the further detailed comment on the regimes set out in this paper and in the Quinlan Reports, the Department agrees that the Western Australia, New South Wales and Queensland regulatory structures provide a useful comparison for the regulation of the New Zealand underground coal mining industry. 42. The Department considers that the United Kingdom also has features that are worthy of consideration, as described in further detail in this paper. 43. The Department s response to Question A2, identifying the significant features or principles of the overseas regulatory structures which are worthy of consideration, is set out in the context of specific issues outlined in Part B of this paper. Response to Question A3: Particular features of the underground coal mining sector in New Zealand which need to be taken into account in making a comparative evaluation against overseas regimes 44. The MED Phase 4 paper sets out the size of the New Zealand coal mining industry relative to the size of the industry in Australia. Coal production in New Zealand is approximately 1% of that in Australia Although the New Zealand coal mining industry could be expected to grow, it will remain small as a percentage of overall economic activity. It is also very small in comparison with the major Australian coal mining states of New South Wales and Queensland. 46. The supporting infrastructure for coal mining is proportionately small in New Zealand. The industry is dominated by one state-owned operator. 5 For further iformation on the general features of the New Zealand coal mining industry see the Phase 4 paper prepared by MED

16 There is limited training capacity for the mining sector and, while the polytechnics meet training requirements for mine management and other operational roles with prescribed competency requirements, mine engineering and other technical qualifications tend to be met from overseas. 48. The boom conditions and high wages paid in the Australian industry mean there is a significant skills drain of NZ qualified miners from New Zealand, while frequently New Zealand vacancies are met from abroad. The Department notes that the Royal Commission heard considerable evidence of this in the operation of Pike River and of the existence of what is effectively an open trans-tasman labour market. MINING REGULATION AND RECOGNISED PRACTICES - THE NATURE AND FORM OF REGULATORY ARRANGEMENTS, PART A: RESPONSES TO QUESTIONS A4-A9 49. The Department s responses to Questions A4-A9 are set out in this Part A, together with some additional matters not expressly referred to in the Questions. An overview of the Department s proposals outlined in Part A, together with further supporting analysis and commentary where the Department considers this may be useful to the Commission, is provided in Part B. Response to question A4 Aside from the HSE Act, what additional regulatory arrangements are needed in relation to the mining industry? The general approach to managing workplace health and safety risks 50. The Department s Tier 2 Paper submitted for Phase 1 of the Royal Commission s inquiry described the process of New Zealand adopting performance-based occupational health and safety legislation, including into the mining sector Performance-based legislation remains the preferred means of regulating in all of the jurisdictions where it has been adopted. Although some jurisdictions maintain separate legislation for the mining industry, this too tends to be performance-based in nature, with an emphasis on systems and so is more akin to principles-based Robens-style legislation than it is to the earlier prescriptive regulation that it replaced In general, across the economy, the Department supports the retention of performancebased health and safety legislation in New Zealand. As a regulatory approach it allows 6 See Department of Labour Tier 2 paper, DOL paras See Quinlan First Report DOL /23

17 12 innovation in workplace practices and businesses to manage health and safety more effectively by allowing scope to choose or develop the means most suited to the circumstances. 53. Conversely, the experience of the remaining prescriptive regulatory regimes is that it becomes increasingly difficult to regulate for all hazards, specified controls can be ineffective, and regulatory practice can become increasingly removed from the health and safety outcomes being sought. 8 A differentiated approach is required for underground mining 54. Within the context of performance-based health and safety legislation, another discussion needs to be had concerning the degree of prescription that is required for the regulation of a high hazard industry such as underground coal mining, where there are well recognised hazards with the potential for catastrophic failure such as the explosion at Pike River. 55. Sector-specific health and safety regulations for high-hazard sectors, including underground coal mining, are therefore framed about the potential for these high consequence, low incidence events. This means that, while many of the individual injuries and illness that occur in other industries occur in the mining industry, and the general legislation and regulations apply, sector specific regulations and inspection processes must aim to eliminate the potential for low-incidence, high consequence events. 56. This principle is fundamental to both the content of, and the rationale for, mine health and safety regulations. Most obviously it defines the requirements that must be included to ensure that the hazards that may cause catastrophic failure are addressed. 57. Less obviously, it sets a standard for the durability of the legislation or regulations that means the funding, administration, technical support and enforcement of the legislation must retain their integrity consistently over the long periods between potential low incidence events. 8 Upper Big Branch - The April 5, 2010 Explosion : a Failure of Basic Coal Mine Safety Practices. Report to the Governor, Governor s Independent Investigation Panel, West Virginia, May 2011.

18 Over time, systems and processes must be resilient enough to resist the competition for resources and attrition that can occur in both the mines themselves and the regulator. 59. There is already a degree of specificity in the regulations providing for health and safety in underground coal mining, but evidence to the Royal Commission and the Department s own analysis suggests that the level of prescription provided is not consistent with comparable jurisdictions and that changes that reflect the specific circumstances of high hazard industries such as underground coal mining could further reduce the probability of future catastrophic events. 60. The Department has therefore begun implementing a more clearly differentiated regulatory approach to the high-hazard sectors of mining, petroleum and geothermal and has established the new High Hazard Unit within its Labour Group. 61. It is proposed that the differentiated approach is based on a combination of strengthened regulatory requirements for mining and other high hazard sector operators, and an increased degree and quality of interaction between the inspectorate and mine operators. 62. In particular,the Department proposes increased prescription of critical health and safety management processes and the steps required to be taken with respect to particular hazards to set more specific standards for the industry. This analysis of hazards would take place in advance of mining occurring, as well as during mining operations In support of this, the Department proposes improvements in the quality of interaction between the inspectorate and mine operators, which will come from new process requirements for the management of hazards in mining (particularly underground), and an increased exchange of information about these processes (via auditing, notification and other requirements involving an exchange of information). Requirment to provide a draft principal hazard management plan before operations commence 63. In response to questions A5c and A5d the Department sets out its proposals for a requirement for operators to provide a draft principal hazard management plan before operations commence.

19 14 Ongoing health and safety management processes 64. Once operations commence, process standards or requirements are one type of regulatory standard found within mining legislation of different countries The HSE (Mining-Underground) and HSE (Mining Administration) Regulations already contain some limited process requirements, for example they specify competency standards for mine managers and other accident and incident notification requirements, and requirements to keep mine plans available for inspectors. But they primarily contain performance outcome requirements. 66. The absence of mandatory health and safety management process requirements from New Zealand s mining regulations was identified by Professor Quinlan as a significant deficiency. 10 It is also a major point of difference between the Australian mining states and New Zealand s regulatory requirements for underground coal mines, and other types of mine. 67. The Department supports this view and would support the introduction of such requirements as a priority. The Department also considers there is considerable opportunity for the development of regulatory requirements that provide for a continuity of hazard managagement processes in all stages of a mine s development and operation. This could be achieved by introducing a requirement to outline draft principal hazard management plans before work commences and that these plans transition into ongoing arrangements for the management of the principal hazards of the operation. 68. There is scope for strengthening process regulations under the existing duties and regulation-making powers contained in the HSE Act. If more extensive process regulations were developed for the mining sector they would be consistent with other regulations made under the Act, for example: 68.1 The Health and Safety in Employment (Pressure Equipment Cranes and Passenger Ropeway) Regulations 1999 containing detailed design verification, inspection and other process requirements. 9 The other two types of standard are performance standards and prescriptive, or specification, standards. See Quinlan First Report para 35 DOL /12 10 Quinlan First Report para 107, DOL /35

20 The Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999 contain a requirement for a safety case to be submitted to the Secretary of Labour for approval before work commences. 69. Strengthened process regulations will formalise hazard management practices for mines, require formal emergency response planning, and increase the quantity and quality of interaction with the inspectorate through increased availability of plans and by requiring notification of incidents and hazardous conditions as specified in regulations. Tighter controls on specific hazards 70. There is scope for the existing specific requirements in relation to mining hazards contained in the HSE (Mining-Underground) Regulations to be strengthened and/or extended with new regulations. 71. The Department supports retaining the existing approach of setting specific requirements for defined hazards by regulation where possible, and as distinct from auditing, accreditation or other processes. This is because some hazards are widely recognised as significant; and the workplace is only accessible to mine workers, managers or others at the request of management, and inspectors with powers of entry. 72. Although regarded by some as becoming outdated, in the Department s view clearly prescribed performance requirements still have clear advantages. These include that they can be monitored and maintained by employers, inspectors and others in the workplace and, where supplemented with other requirements to ensure safe hazard management processes are maintained, still provide the most straightforward and transparent basis for regulating to ensure health and safety in mines. 73. The Department also proposes removing, where possible, the current all practicable steps standard in relation to what must be done to manage particular hazards, and wherever possible replacing it with strict liability requirements to take particular steps. 74. These amendments would be in addition to more detailed requirements for defined principal hazards such as methane, ventilation, and strata management. This would be consistent with the approach taken by the Australian mining jurisdictions. 75. Clarifying processes and specific requirements in relation to hazards would provide more scope for employee awareness and involvement. It would also support suitably

21 16 qualified health and safety representatives to issue hazard notices and take a more active role in the health and safety systems of a mine. Questions A5a, A5b - At what level and when is prescriptive regulation appropriate? What type of regulatory arrangements (regulations, approved codes of practice, codes of practice and industry standards) are most appropriate? Prescription at the level of regulations 76. In the Department s view, regulations provide the best means of strengthening the existing framework. 77. The Department has considered whether increased prescription, as noted above, should be implemented via a new mining Act or via regulations. In the Department s view, a number of factors combine to support the case for new health and safety requirements for underground coal mining being set by regulations, as distinct from a new principal Act, or codes of practice or guidance. In particular: 77.1 The amount of detail required to establish detailed health and safety management processes is more suited to regulations than in a primary Act Regulations are more easily maintained than primary legislation over time, while having more weight than guidance or codes of practice, which are the current vehicle for establishing these requirements, and which have not been well maintained or adopted by industry The preparation of regulations and their administration is well established through existing high-hazard regulations made under the HSE Act. 78. As discussed further below, separate mining health and safety Acts are used in the large scale mining jurisdictions in Australia and elsewhere, where the economies of scale support them. 11 Other overseas jurisdictions have placed mining legislation and regulations under the broader rubric of health and safety legislation The Department s analysis supports the view that the HSE regulatory framework in New Zealand could be strengthened significantly without the need for, or any real benefits to be gained from, a separate Act for the mining sector. 11 See also Quinlan First Report, paragraphs 61-63, DOL /22 12 See Quinlan First Report, paragraph 59, DOL /21

22 17 Following international best practice 80. As noted above (paragraph 12), international best practice in maintaining workplace health and safety is premised on the need for three pillars of support for regulation: 80.1 employer/duty holder responsibility; 80.2 worker involvement and supportive workplace health and safety culture; 80.3 an active and engaged regulator. 81. All three components are interrelated and mutually supporting, but the role of regulation and the regulator is critical. 82. The tripartism principle was introduced by the Robens report and was partially adopted into New Zealand law by the HSE Act, and further with the 2002 amendments to the Act. 83. Internationally, the principle informs the content and approach of International Labour Organisation Occupational Safety and Health Convention 1981, No importance of the principle is also referred to in the literature concerning responsive regulatory approaches. 13. The The Department therefore proposes changes to strengthen regulation to improve health and safety practices and culture in the mining sector through each of the three pillars of support. 84. A review of existing regulations should aim to produce regulatory requirements that are consistent enough with the primary legislation and regulations being developed by the Australian mining jurisdictions to allow New Zealand to both benefit from and contribute to the mining industry infrastructure and expertise of those jurisdictions. Response to Questions A5c and A5d should a safety case requirement or components thereof be included as an aspect of the mining industry regulatory arrangements? If so, what form of requirement is appropriate and should the safety case be subject to review, or approval, by the regulator or an independent third party? Key components of a safety case 85. The Department notes that the term safety case has no clearly defined meaning. For the purposes of this paper, the Department assumes that this term is intended to refer 13 See for example, Braithwaite and Ayres contains a chapter on tripartism in addition to enforcement pyramids and other principles for effective and responsive regulatory approaches].

23 18 to a form of scrutiny and control of an operator s plans, from a health and safety perspective, prior to their implementation, whether at the initial design stage or at other critical stages of the mine s development, where regulatory scrutiny and acceptance (but not approval) is a pre-requisite to operate The potential advantages and disadvantages of a safety case regime in the context of coal mining are described in some detail in Professor Quinlan s First Report. 15 Taking into account the matters noted by Professor Quinlan, and based on its own analysis, the Department supports increased engagement with coal mining operators in advance of operations commencing. In the Department s view, the dynamic nature of mining presents challenges to the implementation of the type of safety case regimes that have been utilised in other high hazard workplaces, but the Department considers such increased engagement could nevertheless include some of the important elements of a safety case regime namely: early disclosure of information by operators, assessment by the regulator and consequent dialogue between the regulator and operator in relation to health and safety planning. This could be achieved by establishing a requirement for mining operations to outline, in a draft principal hazard management plan, how they intend to manage the principal identified hazards of the proposed operation to the Department in advance of operations beginning and to better align such requirements with pre-qualification processes proposed for mining operations that are subject to permitting under the CMA By contrast, under current regulations, the requirement for pre-operational engagement with the Department is limited and is not required to occur until 14 days in advance of the commencement of operations, by which time design and planning may be well advanced In the Department s view, the proposals outlined in response to this Question are an aspect of one of the three pillars of support : an active and engaged regulator. 14 See Quinlan First Report, para 203 DOL /66 15 Supra, paragraphs DOL / For further detail on the proposed CMA pre-qualification requiremens see paragraphs Review of the Crown Minerals Act 1991 Regime, Discussion Paper, Ministry of Economic Development, March 2012 MED Regulation 8, HSE (Mining Underground) Regulations 1999

24 Once operations have commenced, further measures proposed by the Department would facilitate increased engagement for the duration of operations. In summary, 18 to achieve increased engagement over the life of the mine, the Department proposes regulatory change to: 89.1 Require a a draft principal hazard management plan to be assessed before operations begin; 89.2 introduce new process-based regulations to provide more consistency in key health and safety management, emergency preparedness and other processes; and 89.3 more closely prescribe performance outcome requirements for existing and certain new mining hazards. Requirement to provide a draft principal hazard management plan before operations commence 90. There is a strong case for the assessment of underground mining proposals before work begins and for a more integrated approach between government agencies in the preoperational phase of a mine. This would offer the potential for the assessment of mine risks and controls in advance of mining beginning. The requirement for such an assessment can take take different forms, 19 but the Department proposes the requirement for underground mines to be limited to an obligation for the proposed operator to formally disclose the nature and method of the proposed activity, the principal hazards identified and a description of how they will be managed, in advance of work commencing. 91. The requirement for such an assessment will allow both the proposed operator and the Department to better appraise the risks and potential controls or mitigations involved with any proposal. Documenting the process allows the Department to air concerns at the earliest practical stage, which can in turn help avoid hazardous conditions or delays as mining progresses. At a practical level, the intial assessment and proposals to manage principal hazards would form the basis of the required systems once mining is underway. 18 Specific proposals and recommendations following in sections 3 and Refer to UK HSE policy statement: Our approach to permissioning regimes (2003) for a summary of the overlying principles and practices adopted in that jurisdiction