APPLICATION OCCUPATIONAL SAFETY AND HEALTH IN INDUSTRY CASE STUDY: CCM FERTILIZERS SDN BHD IDRIS BIN MD YUSOF

APPLICATION OCCUPATIONAL SAFETY AND HEALTH IN INDUSTRY CASE STUDY: CCM FERTILIZERS SDN BHD IDRIS BIN MD YUSOF A project report submitted in partial fulfillment of the requirements for the award of the degree of Bachelor of Mechanical Engineering With Manufacturing Engineering Faculty of Mechanical Engineering Universiti Malaysia Pahang NOVEMBER 2008

v ACKNOWLEDGEMENTS First of all I am grateful to ALLAH S.W.T for blessing me in finishing my final year project (PSM) with success in achieving my objectives to complete this project. Secondly I want to thank my family for giving morale support and encouragement in completing my project and also throughout my study in UMP as they are my inspiration to success. I also would like to thank my supervisor Mrs. Siti Haryani Binti Tomadi who was gives her believe in me to done this project. I beg for the forgiveness to my supervisor for any mistakes and things that I done wrong while doing my project. Lastly I want to thank all my friends that have given me advice and encouragement in completing my project. Thank you very much to all and May ALLAH S.W.T bless you.

vi ABSTRACT In today s world, rapid economic development has not only led to significant improvements in incomes and the quality of life, but also resulted in great increases in the number of people killed and injured at work. For decades, industries have embraced many systems to minimise workplace accidents and incidents, yet despite the best intention, there has been little reduction in the rate at which people are killed or injured at work. Similar scenario prevails in Malaysia, when statistics from the Social Security Organisation reports indicated that although the number of occupational accidents has reduced gradually, workers especially those in the manufacturing sector still suffer a high level of occupational accidents almost every year. To overcome this problem, the government has come out with a legislative framework to deal with this situation. This study therefore has the purpose of examining safety related matters at work, strictly from the legal point of view. Its objectives are to investigate and analyze the existing system of Occupational Safety and Health in selected industries and to promote and OSHA act 1994 and to improve the safety and health at the selected industry. Qualitative method prone to the legal style of doing research was employed to achieve all the objectives. Hence the data referred in this study consist of all secondary data found in the legislations, journals of safety measurement, thesis and publications of safety measurement. It was found in this study that the selected industry almost obey the regulation of Occupational Safety and Health Act 1994. The results also showed that an accident in the workplace can be controlled if the employers obey the rule of OSH.

vii ABSTRAK Hari ini, pembangunan ekonomi yang pesat bukan sahaja telah meningkatkan pendapatan negara dan kualiti hidup, tetapi juga telah meningkatkan jumlah mereka yang mati atau cedera di tempat kerja. Bertahun-tahun lamanya, pihak industri telah melaksanakan beberapa sistem untuk mengurangkan kadar kemalangan dan insiden di tempat kerja, tetapi malangnya tidak banyak perubahan yang dapat dilihat. Senario di Malaysia juga tidak berbeza, apabila statistik dalam lapuran tahunan Pertubuhan Keselamatan Sosial menunjukkan bahawa walaupun jumlah kemalangan di tempat kerja semakin berkurangan, pekerja, terutamanya di sektor pembuatan masih mengalami jumlah kemalangan yang tinggi hampir setiap tahun. Untuk mengatasi masalah ini, kerajaan telah mengemukakan satu rangka perundangan. Oleh itu kajian ini mempunyai tujuan untuk mengkaji hal ehwal keselamatan di tempat kerja dari aspek perundangan. Objektif kajian ini ialah untuk menyiasat dan menganalisis sistem Keselamatan dan Kesihatan Pekerjaan di tempat industri yang terpilih; mempromosi Akta Kesihatan dan Keselamatan Pekerjaan (AKKP) 1994 dan meningkatkan keselamatan dan kesihatan di tempat industri yang terpilih. Kaedah kualitatif mirip kepada corak kajian perundangan telah digunakan dalam kajian ini. Oleh itu data-data yang dirujuk terdiri dari data sekunder yang diperolehi dari aktaakta yang berkaitan, jurnal berkaitan kaedah mengukur keselamatan, thesis dan juga buku mengenai pengukuran tahap keselamatan. Kajian ini mendapati bahawa di pihak industri yang terpilih sentiasa mengamalkan Akta Keselamatan dan Kesihatan Pekerjaan 1994. Kajian ini juga mendapati bahawa kemalangan di tempat kerja boleh dikawal jika pihak majikan mematuhi etika peraturan Keselamatan dan Kesihatan Pekerjaan.

viii TABLE OF CONTENTS CHAPTER TITLE PAGE TITLE SUPERVISOR DECLARATION STUDENT DECLARATION ACKNOWLEGEMENTS ABSTRACT ABSTRAK TABLE OF CONTENT LIST OF TABLE LIST OF FIGURE i ii iii v vi vii viii xii xiii 1 INTRODUCTION 1.1 Project Overview 1 1.2 Objectives 1 1.3 Scope of the project 2 1.4 Problem Statement 2 1.5 Benefit of the Study 2 1.6 Summary 3

ix 2 LITERATURE REVIEW 2.1 Introduction 4 2.2 History of Manufacturing Industries 4 2.3 Occupational Safety and Health Act 1994 8 2.4 Regulations/Guidelines under OSHA 1994 10 2.5 Implementation of OSHA 1994 12 2.6 Overview of Occupational Accident and Diseases Statistics. 13 2.7 Accident Statistics and Trends 14 2.8 Industries Selected 18 2.9 Industrial Hazard 19 2.9.1 Basic Terminology of Hazard 19 2.9.2 Risk 19 2.9.3 Steps of Industrial Hazard 21 2.9.3.1 Identification 23 2.9.3.1.1 Objectives 23 2.9.3.1.2 Techniques in Identification Step 23 2.9.3.1.2.1 Hazard and Operability Study (HAZOP) 24 2.9.3.1.2.1.1 Procedure of HAZOP 24 2.9.3.1.2.2 Risk Assessment 25 2.9.4 Types of Hazards 26 2.9.5 Hazard Identification Process 27 2.9.6 Evaluation Step 28 2.9.6.1 Measuring Severity 29 2.9.6.2 Severity Coding 30 2.9.7 Control 31 2.10 Industrial Hygiene 31 2.10.1 Basic Terminology of Industrial Hygiene 31 2.10.2 Step of Industrial Hygiene 32 2.10.3 Inspection and Analysis 33 2.10.4 Main Hazards in Industrial Hygiene 34 2.11 Conclusion 34

x 3 METHODOLOGY 3.1 Introduction 35 3.2 Project Flow 35 3.3 Project Flow Chart 36 3.4 Steps of the Project 37 3.4.1 Recognize the OSHA 1994 and its Regulation 37 3.4.2 Industrial Visit 37 3.4.3 Data Collection 38 3.4.4 Analysis the Data 38 3.4.5 Conclusion/ Recommendation/ Suggestion 38 4 RESULT AND DISCUSSION 4.1 Introduction 39 4.2 The Relating Law of OSH Act 1994 39 4.3 Data Collecting 40 4.3.1 Company Background 40 4.3.2 Report on Industrial Activity 41 4.3.3 Occupational Safety and Health Policy 43 4.3.3.1 CCM Group of Companies Health and Safety Policy 43 4.3.3.2 CCM Group of Companies Environmental Policy 43 4.3.4 Occupational Safety and Health Committee 45 4.3.5 CCM Fertilizers Safety Organization 45 4.3.5.1 Company Accident Report 46 4.3.6 Hazard Determination 48 4.3.6.1 Likelihood of an Occurrence 48 4.3.6.2 Severity of Hazard 48 4.3.6.3 Calculating Sequence 49 4.3.6.4 Risk Assessment at the Ammonium Plant 50

xi 4.3.6.5 HAZOP Method at Nitric Acid Plant 51 4.3.7 Industrial Hygiene Data 52 4.3.8 Controlling Hazardous 54 4.3.8.1 Handling and Storage Material 54 4.3.8.1.1 Ammonium Storage 54 4.3.8.1.2 Acid Nitric Storage 55 4.3.8.2 Protection Equipment 55 4.4 Discussion 56 4.5 Conclusion 58 5 CONCLUSION AND RECOMMENDATION 5.1 Conclusion 59 5.2 Recommendation 60 REFERENCES 61 APPENDIX (A)

xii LIST OF TABLE TABLE NO. TITLE PAGE 2.1 Growth of Manufacturing Industries 6 2.2 Approved Manufacturing Project by State (1996-2003) 7 2.3 Number of Occupational Accident Report (1997-2004) 9 2.4 The regulation made under OSHA 1994 11 2.5 The updated regulation in 2002 made under OSHA 1994 11 2.6 Number of Notices of Prohibition and Prosecution 13 2.7 Distribution of Accidents and Fatality Frequency by Sectors 16 2.8 Types of Hazards 26 2.9 Severity 29 2.10 Example of severity coding 30 3.1 Project Gantt Chart 4.1 Regular Office Day 41 4.2 Saturday and Sunday On-Site population 41 4.3 Statistic Report by Year 46 4.4 Statistic Report by Month in 2008 47 4.5 Likelihood 48 4.6 Severity 48 4.7 Chemicals Controlling Hazardous 57

xiii LIST OF FIGURE FIGURE NO. TITLE PAGE 2.1 An accident per 1,000 workers from 1991 until 2000 18 2.2 Unsafe condition unguarded saw blade 20 2.3 Unsafe condition lack of space 21 2.4 Process Flow Chart Steps of Industrial Hazard 22 3.1 Project Flow Chart 36 4.1 CCM Fertilizer Sdn Bhd 41 4.2 Manufacturing process plant 42 4.3 CCM Fertilizer Manufacturing Cycle 42 4.4 Policy Company of CCM 44 4.5 Safety Organization of CCM Fertilizers 46 4.6 Accident Report 47 4.7 Sequences 49 4.8 Nitric Acid Plant 51 4.9 Report of Industrial Hygiene 52 4.10 Ammonia storage tank container 53 4.11 Storage Tank of Acid nitric 54 4.12 Penalty given by the CCM Company 55 4.13 Example of Chemicals Sheet Data 57

CHAPTER 1 INTRODUCTION 1.1 Project Overview In order to obtain a safety places in a manufacturing industry, an efficient and appropriate system of safety and health are considerable importance. To investigate and learn the system of safety and health in the manufacturing industries, the occupational safety and health (OSH) system is required to show how do the industries manage the safety and health rules in their places. The approach of managing OSH in a systematic way through management system at the manufacturing industries has become increasing popular in recent years. The aim of this study is to help improving the management of safety and health at manufacturing industries sector and to ensure that the Occupational Safety and Health Act 1994 and it regulation was followed by industries. 1.2 Objectives This study adopts the qualitative approach with a view to study the scope of laws and regulations in occupational safety and health. The objective of this study stated as follows: a) To investigate and analyze the existing system of OSH in selected industries. b) To promote and OSHA act 1994 and to improve the safety and health at the selected industry.

2 1.3 Scope of the Project The research will look for system of safety and health at selected industry to emphasize on action-oriented activities to make the safety program successful. This research will focus on manufacturing industries in Malaysia. Areas of study are limited to the following: a. Identifying all laws, regulations, codes of practices and guidelines relating to safety and health at workplaces which come under the purview of the parent act i.e. Occupational Safety and Health Act 1994. b. Identifying the real situation of safety and health at the manufacturing industries. 1.4 Problem statement Occupational safety and health is the discipline concerned with preserving and protecting human and facility resources in the workplace. Now day, we are always hearing that the accident cases are happened in manufacturing industries. The percentages of an accident in the manufacturing industries sector are always high compare to the other sector. The accident are always happened because poor or don t care acting on Occupational Safety and Health (OSH) performances in some company. OSH standards are mandatory rules and standards, set and enforced to eliminate or reduce OSH hazards in the workplace. OSH standards aim to provide at least the minimum acceptable degree of protection that must be afforded to every worker in relation to the working conditions and dangers of injury, sickness or death that may arise by reason of his or her occupation.[3] 1.5 Benefit of the Study The research community will benefit as the in-depth analysis provided by the current research will allow them to identify areas of concern and conduct further research that will build on the existing local database in the area of safety and health.

3 1.6 Summary Briefing, on this chapter discussed about the project background such as problem statement, important and relevancy of the study, objective of the project and scope of the project (limitation of the project).

4 CHAPTER 2 LITERATURE REVIEW 2.1 Introduction This chapter will looks at the manufacturing sector history and the Occupational Safety and Health Act 1994 in detail. This chapter also explains about the statistic accident in industries and method that will use to measure the hazardous. 2.2 History of manufacturing industries Malaysia is among the third world countries that have experienced extraordinary economic changes during the last thirty years which have made it into a more modernized and wealthier country. The Malaysian economy has diversified considerably from the time when rubber and tin were the economic pillars of the colonial economy. The attainment of independence almost fifty years ago heralded the beginning of the economic development in the country. From independence in 1957, the economy has been growing steadily and as the economy expanded, its composition changed as well. Industrialization through import substitution in the 1960s was followed by an emphasis on manufactured exports in the 1970s and the launching of heavy industries in the 1980s. Despite the financial crisis in 1997, which to some extent affected the economic goals of the country, Malaysia was able to achieve an average economic growth rate of 7.0 per cent per annum for the period 1991-2000 as targeted under the Second Outline Perspective Plan (Economic Planning Unit, 2001a). The impetus for the strong growth 13 of the country s economy during the decade came from the private sector, in contrast

5 to the high level of public sector involvement in the economy in the 1980s. This was in keeping with the government strategy to promote the private sector as the engine of growth. In this context, the manufacturing sector continued to act as the main stimulus to the growth of the Malaysian economy with its annual growth of 10.4 per cent during the Second Outline Perspective Plan period between 1991-2000. [3] In another economic report which was also published in 2001, the Eighth Malaysia Plan Report (8MP Report), it was stated that various measures were implemented by the government to consolidate and strengthen the competitiveness of the manufacturing sector during the Seventh Malaysia Plan (7MP) period from 1996 to 2000 (Economic Planning Unit, 2001b). Although output was affected during the economic slowdown in 1998, with the sector registering a contraction of 13.4 per cent, the overall performance of the manufacturing sector recovered strongly in 1999. The sector grew by 13.5 per cent in 1999 and 21.0 per cent in 2000, in line with the rapid growth in demand for manufactured goods. With the favourable performance of the sector, its share to Gross Domestic Product (GDP) raised from 27.1 per cent in 1995 to 33.4 per cent in 2000 as shown in Table 2.1. [3]

6 Table 2.1: Growth of Manufacturing Industries (1995-2000) More evidence about the satisfactory performance of the manufacturing sector could be seen despite the economic slowdown in 1998, when the Malaysian Industrial Development Authority (MIDA) reported that about 3,908 new manufacturing projects were approved in the country between 1996-2000 during the 7MP period (Table 2.2). This has brought about a total investment amounting to RM136.9 billion. Subsequently,

7 another 2,651 new projects were also given the go ahead between 2001-2003 resulting in investment of more than RM70 billion (Table 2.2). [3] Table 2.2: Approved Manufacturing Project by State (1996-2003) The expansion of this manufacturing sector contributed significantly to the employment creation during the 7MP period and the subsequent years. During the 7MP period, about 407,422 new jobs were created (Table 2.2) in the sector which meant that employment have expanded at a rate of 4.8 per cent per annum, faster than the target of 3.4 per cent. As a result, a total of 2,558,300 people were employed in the sector in 2000

8 compared with 2,027,500 in 1995. Additionally, the new projects approved between 2001-2003 have also created more than 250,000 new employments (Table 2.2). [3] The manufacturing sector is targeted to grow by 8.9 per cent per annum during the 8MP period, contributing 35.8 per cent to the share of GDP by 2005. The growth of the sector will be export-led, with export of manufactures projected to grow by 8.9 per cent per annum, accounting for 89 per cent of the nation s export earnings by 2005.[3] 2.3 Occupational Safety & Health Act 1994 At present the main Act that deals with safety and health in the manufacturing sector is the Occupational Safety and Health Act 1994 which was officially enforced in February 1994. It was welcome by many quarters as they felt that it was about time that Malaysia adopted a more comprehensive approach in dealing with accidents at the work place where all related parties must participate in this effort. Placing the main burden on the government (as under FMA) seemed to be an unwise strategy as the rate of accidents remains stubbornly high in the work place. [8] While the government s strategy is logical, the safety of the workers while working in that sector should not be taken lightly. This is because reports released by the Malaysian Social Security Organization revealed that workers in the manufacturing sector suffered the highest number of occupational accidents almost every year, as compared to workers from other sectors. This is clearly illustrated in Table 2.3. If this situation is allowed to continue without any effort to try at least to reduce it, if not to prevent it, then the researchers are convinced that the high performance of the manufacturing sector will not continue for long. It is submitted that the present satisfactory performance of the sector does not necessarily foretell similar exceptional performance in the future. This achievement could be endanger if proper action on workers safety at work is not given adequate attention.[8] Statistic released by the Ministry of Human Resources showed that in 1991, a total of 127,367 industrial accidents were reported of which 603 were fatal and in 1992, 778 workers died in accidents at work which totaled up to 124,503 incidents. According

9 to the analysis of RMK8, the result shown that the manufacturing industries sector given the highest number of occupational accident compare to the others sector.[8] Table 2.3: Number of Occupational Accident Report (1997-2004) It can be seen from the earlier discussion that the manufacturing sector has the potential of contributing further to the country s economic growth. This will definitely offer a wide range of job opportunities in the sector for all categories of workers. In addition to this expansion, there will also be an increasing adoption of new technologies which means that more sophisticated machines will be used at the workplace. This in turn will require the workers to be more competent in their work at all times. Thus the importance of ensuring the safety of the workers should be given priority by all quarters in order to avoid more occupational accidents from happening in the manufacturing sector. Under the Malaysia Industrial Development Authority (MIDA) list of industry, there are a number of manufacturing industries which are classified as manufacturing

10 sector. The major manufacturing industries are electronic industry, automobile industry, textile industry, wood based industry, steel industry and petrochemical industry.[8] 2.4 Regulations/Guidelines under OSHA 1994 A series of regulations have been introduced under OSHA 1994. The emphasis of these regulations has been on establishing mechanism to implement OSH in workplaces. Workplaces with five or more workers are required to formulate a Safety and Health Policy. The Safety and Health Committee Regulations 1996 requires establishments with 40 workers and above to establish a safety and health committee. The committee is required to meet at least once in every three months, with the functions to identify hazards at the workplace, institute control measures, investigate incident and conducting audit.[7] In terms of representation in the committee, workplace with less than 100 workers will need to have at least two representatives each for workers and management respectively. However, workplaces with more than 100 workers will need to have a minimum of four representatives each for workers and management. The Safety and Health Officer Regulations provide for specific industries to have a Safety and Health Officer (SHO). A SHO is an individual who has attended training in National Institute of Occupational Safety and Health (NIOSH) or other accredited training bodies and has passed the examination conducted by NIOSH and registered with Department of Safety and Health (DOSH).[7]

11 Table 2.4: The regulation made under OSHA 1994 Table 2.5: The updated regulation in 2002 made under OSHA 1994

12 2.5 Implementation of OSHA 1994 A Survey carried out by the local researchers showed that 61% of the workplaces have OSH policies, 83% of workplaces have safety and health committees, 86% of major installation have health and safety management system, 38% of non-major installations have health and safety management systems and 71% of Chemical Industry Council (CICM) members have responsible care programs. Since the introduction of Safety Induction for Construction Workers (SICW) was implemented in 1999, there are 240,000 green card holders up to 2001. [7] There have also an increasing number of OSH competent persons as required by OSHA 1994. As of 2001, there are about 1200 Safety and Health Officer (SHO), 30 noise competent persons, 81 chemical health risk assessors and 124 occupational health doctors. The number of OSH practitioner will be increasing in the coming years. DOSH has also increased the frequency of inspection under the Inspection and Audit Program for the small and medium sized industries from 2002 until 2006. Each year, there will be about 2500 to 3400 small and medium sized industries scheduled to be inspected. This is due to the fact that around 90% of the private business establishments in Malaysia are from the small and medium sized industries. [7] Up to June 30, 2002, there are 3,340 notices of improvement/ prohibition being issued and 49 have been prosecuted in court (Table 2.6).[7] Institution providing various OSH services could be the driving force to enhance the implementation of OSHA 1994. These institutions are DOSH; Social Security Organization SOCSO; Workers and Environmental Health Unit, Ministry of Health; NIOSH; Universities; Society of Occupational and Environmental Medicine, Malaysia Medical Association (MMA); Malaysian Society for Occupational Safety and Health (MSOSH); Malaysian Occupational Health Nurses Association (MOHNA);OSH Department in Malaysian Trades Union Congress (MTUC); Various consumer and environmental groups such as Sahabat Alam Malaysia (SAM) and Consumer Association of Penang (CAP).[7]

13 Table 2.6: Number of Notices of Prohibition and Prosecution 2.6 Overview of Occupational Accident and Diseases Statistics In Malaysia, the Employees Social Security Act 1969 empowers SOCSO to administer two schemes to compensate Malaysia workers who are earning less than RM2,000 for employment injury (which includes occupational diseases) and invalidity from any cause. Under the Employment Injury Insurance Scheme (EIIS), workers who are on four days away from work due to work related or occupational commuting accident is eligible for the benefits. The benefits cover medical benefits, temporary disablement benefits, permanent disablement benefit, constant attendance allowance, rehabilitation (artificial limb and other appliances), dependants benefit, funeral benefit and educational loan benefit. The Invalidity Pension Scheme is a non-occupational related scheme and is for member who has suffered from invalidity of a specific morbid condition of permanent nature and is unable to engage in any substantially gainful activity. To be eligible for the benefit, the member must be less than 55 years old and have made at least 24 contributions out of 40 months prior to the notice of invalidity, or in the case less than 24 contributions, there must be contributions for at least two-thirds of the total months. The benefits under this scheme include invalidity pension, provision of constant attendance allowance, rehabilitation benefits, funeral benefit, survivors benefit and educational loan benefits. [8]

14 The Factories and Machinery Act 1967 and the Occupational Safety and Health Act 1974 require all cases of occupational injuries or diseases to be reported to the Department of Occupational Safety and Health (DOSH). In 1993, all foreign workers were excluded from the SOCSO scheme and administered by the Department of Labor under Workmen Compensation Act 1952, with the private insurance company provide the insurance coverage. [8] 2.7 Accident Statistics and Trends SOCSO statistic which comprises all the active and registered workers are by far the most used source of data for occupational diseases and accidents in Malaysia. Based on SOCSO statistics, the number of industrial accident had increased from 51,340 in 1980 to 95,006 in 2000. Similarly, the number of industrial fatalities had also increased from 143 in 1980 to 1004 in 2000 (Table 2.7). This is mainly an evidence of the increased number of people covered under SOCSO. [3] In terms of per 1000 workers, the accidents in fact has declined since 1994 and has now hit a plateau at about 15 per 1000 workers in 2000 (Figure page 18). This figure is higher than the developed countries such as Japan, European countries, UK and USA, which has an average of 5 reported accidents per 1000 worker, and Korea which represents a developing country, has 9 reported accidents per 1000 workers in 2000. The sharp decline observed in 1994 could be contributed by the introduction of Occupational Safety and Health Act 1994, exclusion of foreign workers from the SOCSO scheme in 1993 and also during that time, SOCSO administration had changed the procedure for making compensation claim. The present raised ground of the reported accident rate could be contributed by the small and medium sized industries which have poorer OSH resources and higher accident rate. [3] Injury statistic in 2000 showed that the highest number of accidents occurs in the manufacturing sector, followed by commerce and agriculture / forestry / fishing sectors. In terms of number of fatalities, manufacturing recorded the highest with 282 cases followed by construction (159) and commerce sectors (151). This distribution was due to