Monitoring and Enforcement of Occupational Safety and Health Standard in Banana Plantations: Does Non-Compliance Pay?

Abstract

Like other laws and regulations, enforcement of the Occupational Safety and Health Law does not happen without the compulsion from government authorities accompanied by work-site inspection and penalties. Becker and Stigler (1974) confirms that the aim of enforcement is to attain that desired degree of compliance with the rule of prescribed behavior, and the critical reason that prevents an entity from enforcing full compliance is that enforcement is costly. This study extends the classroom game conducted by Anderson and Stafford (2006) wherein it highlighted the business unit’s responses to changes in monitoring probability relative to changes in enforcement severity. The game was put into an actual setting of analyzing the dynamics of enforcement strategies in the context of banana plantations. This study confirmed that all business units that have been caught in the past will be inspected each day, and for those that never been caught will be selected at random for inspection. Also, it confirmed that having been caught as non-compliant generally does not result in more compliance unless past violations increase future fine or punishment. Though there was no significant increase in fines, the banana farms exhibited an increased level of compliance. This performance is suspected to be due to the banana plantations’ natural response to the successive results of inspections because of the recurring non-compliance.