The challenges of regulation and its enforcement

When developing a regulatory framework intended to keep people safe and healthy at work, what approach do governments and regulators take? The two approaches most commonly taken can be described as risk or hazard-based. Although both are elements of the overall risk management process, there are subtle differences between the two terms.

A hazard is often defined as something with the potential to cause harm, whereas a risk is the likelihood of that harm being realised.

A risk-based regulatory approach is one designed to manage risk by identifying and assessing significant risks based on relevant data. Enforcement by a regulator then focuses on risks associated with non-compliance with these legal requirements, rather than determining the legal duties themselves. This is the approach adopted by UK regulators. It helps them to prioritise how best (effectively, efficiently and consistently) to use their finite resources.

Mike Robinson: "While we trust regulation to keep us safe at work, we must remain vigilant to attempts to dilute protections and fight our corner."

In the EU, and elsewhere, a predominantly hazard-based approach is used. It is sometimes referred to as following a ‘precautionary principle’. This means where there is no evidentiary proof of a causal link between an activity and harm, but a hazard is identified, it is better ‘to be safe than sorry’ with preventative measures taken.

For example, this approach was used by the EU for assessing genetically modified organisms. Regulation under this hazard-based approach, say for chemicals, creates rules for substances based on their intrinsic properties, meaning simply if the presence of a ‘harmful’ substance is detected, it must be substituted, or the product banned. This can stifle innovation. Whereas, a risk-based approach factors in the amount of, and exposure to, the substance.

The advantages and disadvantages of both approaches have been a topic of much debate, with the use of risk-based approaches by regulators worldwide in the ascendancy. While risk-based enforcement has its advantages, the proportionality of this enforcement can be challenging.

Consider this: the government wants to re-open the economy during the Covid pandemic, but in doing so, workplace health and safety must be maintained to protect workers. In terms of enforcement, success can mean either the number of workplaces that have been enabled to safely re-open and remain open by working together with the regulator, or the number of workplaces closed or employers prosecuted for non-compliance with the rules. Or is it both?

Risk-based regulation and risk-based enforcement are not perfect, but if something goes ‘wrong’ then that is more likely to be interpreted as a failure of regulation – the rules themselves, which the government determine – rather than a consequence of a regulator’s enforcement of the rules. The 2008 financial crisis is an example where deregulation that preceded the crisis was a causal factor.

Having left the EU, the UK has new regulatory freedoms and may well review the HS&E regulatory framework to ensure it remains relevant. There are pluses and minuses with both the UK and EU approaches – no regulatory framework is flawless, the corollary being is why pencils have erasers.

While the UK could drop some elements of the EU rules it does not feel are appropriate, such as on workers’ rights, if a review does take place, it should not water down the existing regulations and keep the needs of workers front and centre, rather than ‘economics’.

While we trust regulation to keep us safe at work, we must remain vigilant to attempts to dilute protections and fight our corner. Here at the British Safety Council, we are alive to this challenge.

Mike Robinson FCA is chief executive of the British Safety Council