In March 1998, there was a near complete electricity breakdown in the fuel-cycle section of the Dounreay Nuclear Plant in Scotland. Fortunately, a serious incident was averted. The UK Government subsequently appointed a team of 16 inspectors to conduct a safety audit of the Dounreay site. The outcome of the multiagency audit included a number of recommendations, some of direct relevance to recent fatal events in Australia with which I have been involved. I refer to the fire on HMAS Westralia, [an Australian Navy vessel], the landslide tragedy at Thredbo [an Alpine resort in Australia] and the botched Royal Canberra Hospital Demolition [an intended implosion for the demolition of a community hospital]. For myself, and more importantly, for the survivors and families, the topic of discussion is deeply personal. At this time, convention requires one to avoid any direct analysis of these tragedies ± the author leaves the reader to draw the parallels. The Dounreay incident indicated that outsourcing of key functions had `weakened the management and technical base at the site' ± inhouse specialist skill had been eroded. The auditors also referred to the Atomic Energy Authority's mindset that it was compelled to accept lowest tenders. The auditors believe that this mindset was influenced by the fact that fines for occupational health and safety (OH and S) breaches were substantially lower than civil damages awards for breaches of Government competitive tendering rules. In referring to the weakening of management and technical skills at the site, the auditors bring to mind my own experience of finding that Government and Government Corporations progressively divest themselves of specialists, with consequent loss of corporate memory, thereby eroding their ability to set effective tender criteria and to assess tenderers against, among other concerns, risk management issues. With the weakened ability to set performance parameters goes the lack of institutional foresight and, in legal terms, foreseeability of risk and the imposition of duties of care. This has proved a bonanza for lawyers, at great cost to shareholders and the community. Lest one takes Dounreay as an absolute indictment of out-sourcing, let one say that one of Energy Australia's senior managers [Mervyn Davies] recently acknowledged that while outsourcing attracts its own special `risks', it can actually enhance controls if task-specific financial rates and quality output standards are devised and implemented. Davies said that managers should assess the increased risks associated with loss of in-house skills and take steps to ensure that exposure to public liability risks by indifferent contractors and sub-contractors is borne in mind. Energy Australia had, for example, outsourced core activities, such as electricity pole inspections, pole replacements, tree trimming and so forth. With this, went ensuring that contractors employed teams of specialists and that Energy Australia recruited in-house supervisors to monitor and control contractors and employees. Davies acknowledged that contractors, at least in the cable laying area, had worked in ways some would say unacceptable by internal (in-house) standards (The Risk Report, 1998). The experience of another agency which outsourced, in this case, building maintenance services, is also positive. Building maintenance for the Queensland Workers' Compensation Board's two Brisbane buildings was out-sourced to Honeywell in October 1995. The Board has reported that they previously had to audit their contractors to keep them honest, however, it knew that if Honeywell is to achieve its guaranteed savings (under an incentive plan) it would have to ensure that everything is performing at optimum level (The Risk Report, 1997b). Nevertheless, not all work is out-sourced to giant corporations with international and national quality assurance standing. Typical out-sourcing occurs at work levels in local government and from larger corporations. Quality Assurance status is usually a pre*Barrister, Canberra, Australian Capital Territory
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Jul 1, 2008
Catherine Singer + 1
Open Access
