Sunday, August 27, 2006

Incentives To Cheat: OSHA Recordkeeping And Its Toll On Workers

Injury and illness recordkeeping is one of those seemingly boring, but extremely important topics. Who OSHA targets for inspections, funding for workplace safety programs, companies' insurance rates and their ability to secure contracts all depend to some extent on where the injury and illness numbers are. And as with any such system, when significant finanical implications are matched with inadequate oversight you have a predictable result: lots of cheating.

The Contra Costa Times takes a deep look into how KFM, during its project to rebuild the Bay Bridge, systematically lied about workers' injuries on the project:
Doctors who scanned Bay Bridge skyway carpenter Ramon Martinez's brain prohibited him from working with machinery after he was struck on the head.

They declared mechanic Keith Bates totally disabled after he fell from a truck on the bridge construction site.

Workers had to lift pile driver Arne Paulson, hobbled by a knee injury, onto a boat daily for months to transport him to a bridge pier.

According to injury records provided to state worker safety authorities, none of these workers missed a day of work or required anything more than first aid. Many injury victims, including Bates and Paulson, were fired shortly after they received independent medical care.

The contractor building the Bay Bridge's $1 billion replacement segment concealed worker injuries behind a sophisticated curtain of bonuses, pliant medical workers and a don't-ask-don't-tell policy of handling workers' compensation claims and safety conditions, a review of state records shows.

Workers for KFM, A Joint Venture, were routinely fired when their injuries were too severe to hide, according to official interviews with workers, foremen and safety officers, as well as a state Division of Occupational Safety and Health (Cal/OSHA) review of injury logs and medical records.
How did they do it? First, KFM has a classic safety program that rewarded workers who had not experienced (or reported) an injury, and punished those who were injured on the job. Even when workers reported injuries, the company made sure that no one missed a day of work -- no matter how serious the injury -- and if the injury was too severe, the worker was simply fired.
Whenever Cal/OSHA safety inspectors arrived on the bridge site, KFM safety managers would offer up a "dog and pony show" during which they withheld their own misgivings about worker safety, according to a statement by Winston Peart in the state audit. He is a former KFM safety manager and former Arizona state worker safety compliance officer.

Peart, a 40-year safety veteran, told a state auditor in October that he "witnessed a pattern of deliberate underreporting of injuries," which were routinely minimized as requiring only first aid so workers could return to work. Missed work is one of the criteria for determining that an injury is severe enough to include in logs kept for state authorities.

When injuries occurred, Peart reported, his supervisor "would accompany the victim to a KFM-controlled medical clinic" where he "knew the doctors there and had some degree of influence in persuading them to classify injuries in a way as to not make them either reportable or recordable, depending upon the severity of the injury."

Cal/OSHA investigators cited the company for failing to record the back injury of carpenter Darrell Hall, whose company-contracted doctors prescribed increasing levels of "modified work" until he could not stoop or bend, or lift anything heavier than 5 pounds and could work only while seated.

Five days after seeking outside medical help, Hall was fired, according to the record accompanying the Cal/OSHA citation.

Cal/OSHA noticed these injuries only after the state audit criticized the agency for failing to properly police the skyway worksite.

(Another story of a worker fired due to his injuries here.)

KFM had once boasted about its immaculate safety record, five times safer than the average heavy construction project, "even safer than your average flower shop." But last June Cal/OSHA issued three citations against KFM, fining the company $5,790 fine - including $5,000 for the willful violation, the maximum penalty allowed. Cal/OSHA accused the company of deliberately failing to record 13 injuries on their OSHA Log 300 report. The citations followed a report by the California State Auditor that accused the agency of not having procedures necessary to verify the accuracy of injury and illness reporting, and noting that the Cal/OSHA's compliance assistance/partnership approach with the company made it even more difficult to uncover unsafe conditions and faulty reporting.

In 2005, an Oakland Tribune article reported that KFM's amazing safety record was likely due to the $100 to $2,500 bonuses that depended on the number of worker hours logged without reporting a recordable injury, rather than safe working conditions. KFM and its lead firm, Kiewit Pacific Company, also used the stick: suspending workers without pay for reporting injuries.

And why cheat? Because it pays.
A contractor's safety is not among the main factors used to award construction contracts or bonuses for completing work early, said Bart Ney, spokesman for Caltrans, which is paying for the two main segments of the Bay Bridge eastern span.

But if a contractor had a poor safety record, "then their insurance goes sky-high and they can't bid. It's sort of market-controlled," he said.

Safety records might also come into play if other factors, such as the amount of money bid for a contract, were equal, he said.
In addition, in order to "leverage" its scarce resources, OSHA has a system for targeting the most dangerous workplaces. And what is this targeting system based on? These same self-reported injury and illness statistics.

Last may, we ran a series about OSHA recordkeeping by guest-bloggers ERM who alleged that even state enforcers may have an interest in perpetuating the bankruptcy of the recordkeeping system. If injury and illness statistics are dropping, OSHA (or CalOSHA) can point to the number as proof of their programs' success. And then there was this "benefit" described in the Contra Costa Times article:
Those figures, which show California with a lower-than-average injury rate, were used by Gov. Arnold Schwarzenegger to help justify vetoing $1.5 million from the state budget to hire 15 safety inspectors for Cal/OSHA.
(More on Scharzenegger's budget priorities here.)

The union representing CalOSHA inspectors has complained that understaffing of the agency restricts their ability to oversee safety conditions or accurate reporting. The understaffing is caused by the failure to maintain CalOSHA's budget, a situation that the Governor justifies by citing the (undercounted) injuries and illnesses. The undercounted statistics also justify the partnerships that further reduce the oversight CalOSHA is able to exercise over workplace safety and accurate recordkeeping. It's a nice tidy little circle -- a win-win situation -- unless you happen to be a worker.

And the problem is much bigger than just the Bay Bridge project:
Collecting accurate data on workplace injuries and illness is a significant problem in California with effects that reach far beyond the Bay Bridge project, said Fran Schreiberg, acting director of WorkSafe, an Oakland-based nonprofit group that promotes workplace safety policy.

When statistics are skewed by chronic underrecording, she said, "the whole thing becomes a downward spiral: 'Gee, everything's fine, nobody's reporting anything, so let's give employers greater freedom.'"
The most amazing (and disturbing) thing throughout this whole affair is how, even after the devastating articles in the Oakland Tribune and Contra Costa Times, even after the California State Auditor's report, and even after the citations, Cal/OSHA officials continue to stick to their defense of the company and their own failed programs:
Cal/OSHA spokesman Dean Fryer said the agency views the partnership as a success, and that KFM agreed to it after the discovery that welders were exposed to hazardous levels of manganese fumes.

Focusing on the accuracy of the injury logs, which "has been in question since the requirement to keep these logs was first adopted," Fryer said in an e-mail, "is a classic case of missing the forest for the trees.

"This project is now close to logging over 3.5 million worker hours without a fatality and with very few serious injuries. This is an extraordinary accident record," he said in response to an e-mail query asking the agency to rate its oversight of the skyway project.

"This type of project involves extremely hazardous work and is very prone to causing serious injuries. The low rate of fatalities and serious injuries, which cannot be hidden and no one has alleged to have been hidden, is the kind of result the partnership set out to accomplish." (emphasis added)
Finally, just to add illness to insult to injury, the 13 injuries that OSHA cited KFM for not reporting were apparently just the tip of the iceberg, according to another Contra Costa Times article:
The welders connecting the foundation of the new Bay Bridge to the rest of its structure labored in confined spaces up to 40 feet below the waterline in 150-degree temperatures while inhaling fumes measured above the legal limit for manganese.

But when the California Division of Occupational Safety and Health (Cal/OSHA) slapped KFM Joint Venture with 17 citations last June, the state agency declined to cite the contractor for ignoring the claims of as many as 48 sick welders who blamed their illnesses on manganese overexposure, leaving them to fend for themselves in Bay Area clinics and courts.
Despite a report from a research that the workers "had increased respiratory problems, and their working memory was impacted from the manganese,"
Len Welsh, acting Cal/OSHA division chief, said theevidence linking Bay Bridge manganese levels to illness "was a little too problematic" to issue citations.

"They found manganese in their blood," Welsh said. "There are lots of things in the blood — that doesn't mean you have a disease."

According to state regulations, work-related illnesses "involving chronic irreversible disease" are required to be recorded in the Log 300 — the document at the core of the other citations — even when the illness does not lead to missed days of work or restricted duty.
In May 2005, forty-three Bay Bridge welders filed a lawsuit against KFM and a number of other welding rod manufacturers and other companies, accusing KFM and the other defendants of failing to alert workers to the hazards of manganese exposure and failure to address their illnesses.

One final note. When the media starts piling on one or two bad companies -- such as KFM or McWane Industries, for example -- there is a tendency to think of these companies as uniquely evil. In fact, however, the problem of underreporting is chronic not just to California, but throughout the country. A recent study by Michigan State University researchers, for example, found that the current national surveillance system for work-related injuries and illnesses may miss two-thirds of the total number of occupational injuries and illnesses.

Until the system is cleaned up, we need to take OSHA's annual self-congratulating boast-fest about declining injury and illness statistics with several grains of salt.

Related Stories

OSHA Recordkeeping Series by ERM

Part I: Learning From Enron: Why Accurate OSHA Recordkeeping Matters, May 15, 2006
Part II: At AK Steel, as at Enron, the Numbers Don’t Add Up, May 23, 2006
Part III: OSHA Recordkeeping and KFM: Who Will Audit the Auditors?, May 27, 2006

Confined Space KFM/Bay Bridge and Related Stories