March/April 2009
OSHA's Voluntary Protection Program has concrete benefits, from fewer accidents to exemption from regular site inspections and fines. So why don't more scrap companies participate? By Kim Fernandez
For some scrap recyclers, a visit from Occupational Safety and Health Administration representatives is enough to induce acid reflux. OSHA inspectors visit scrapyards for one reason and one reason only, many believe: to nail owners for safety-code violations and hand out big fines.
OmniSource Corp.'s Ryan Nolte doesn't have to break out the antacid when he sees an OSHA badge flashed in his office, however. That's not because he has an especially strong stomach. He knows he has nothing to worry about in the safety and health department at the company's Fort Wayne, Ind., facility because of a certificate hanging on his office wall that makes him a partner with the agency instead of its adversary.
OmniSource's Fort Wayne facility joined OSHA's Voluntary Protection Program in 2004, becoming the first scrapyard in the United States to meet the program's health and safety requirements and begin working with the agency in a proactive, rather than reactive, capacity. Instead of violations and warnings, OmniSource gets regular visits, suggestions, and assistance with health and safety regulations from the agency.
Though Nolte, the company's corporate VPP manager, admits the certification process was a bit long and arduous, it's been well worth the effort for two major reasons, he says. First, he doesn't worry about OSHA violations anymore. And second, since earning its VPP certification, the Fort Wayne facility's accident and injury rate has gone down—way, way down.
"Overall, we've had a 90-percent reduction" in the rate of total recordable incidents, he says. "During that time period, we've also seen a 33- percent increase in hours worked. Statistically, as hours go up, you generally see the number of accidents go up. But ours have gone down." That 90-percent reduction in accidents has had additional benefits, Nolte points out. "We've seen a 40-percent reduction in workers' comp losses since 2001," he says, "and this one facility has had no lost-time accidents in five years."
With several years and multiple levels of OSHA VPP certification under his belt, Nolte is an unabashed fan of the program. But other scrap companies haven't rushed to follow the company's example. There may be several reasons for their reluctance—some based on mistaken ideas about how the VPP works. But Nolte and others say that a company with the means to pursue certification would reap myriad benefits from the process.
Parameters of the Program
OSHA launched the Voluntary Protection Program in 1982 in an effort to reduce workplace accidents and safety problems across the country. The concept is simple: OSHA will partner with companies that demonstrate a strong commitment to health and safety protection. Sites that achieve VPP certification are exempt from regular inspections. Instead, they work with OSHA to maintain their certification and meet health and safety code and regulation requirements.
OSHA defines three categories of VPP participation:
Star. Star-rated companies have "exemplary worksites with comprehensive, successful safety and health management systems," according to OSHA's description. Their injury and illness rates are at or below the average for their industries, and they are self-sufficient in controlling workplace hazards. OSHA reviews a company's Star certification every three to five years and reviews its incident rates annually.
Merit. Merit-rated companies have good health and safety systems but need some improvement to reach excellence. Companies can maintain Merit status for three years while working to achieve Star status through system improvements. They are subject to on-site evaluations every 18 to 24 months.
Star Demonstration. At this level, companies with Star-quality programs test alternatives to the established Star eligibility and performance requirements. OSHA reviews these companies every 12 to 18 months.
When a company applies to the VPP program, OSHA undertakes a multi-step review of its records, inspection history, and logs; meets with employees; conducts site walk-throughs; and holds a closing meeting with the company to discuss its results and findings. It assigns approved sites their own OSHA representatives, who work with the facility's employees to answer questions and maintain compliance. Though approved sites are exempt from routine inspections, they can be subject to inspection if someone files a complaint against them or they experience an accident, chemical spill, or other hazardous event.
A High Hurdle
Doug Dunaway, director of health and safety for Schnitzer Steel Industries (Portland, Ore.), has seen the certification program from both sides. He helped General Electric maintain its VPP status several years ago, then he went on to become a special government employee who assisted OSHA in the on-site evaluation of VPP applicants. He's now working on the VPP applications of several Schnitzer facilities, which he hopes to submit by the end of the fiscal year. "Schnitzer has had a long-term commitment to job-site safety, and our safety efforts have evolved and grown over time," he says. "Participation in the OSHA VPP is in some ways a natural progression" for the company.
Those familiar with the program say it can be challenging to qualify, especially if a company does not already have established health and safety programs. "Each company would have to evaluate its costs [of achieving VPP status] on its own," Dunaway says. "If a company only had a modest safety program, VPP [certification] would be a significant change." At the same time, he adds, "our industry has been pushing safety more and more. … The many benefits of a safe work environment are such that, once ramped up, it may be harder to separate out costs unique to participation in the VPP."
It's tough to qualify even if a company has health and safety programs and regularly passes OSHA inspections, he adds. Nolte agrees. "It can be painful," he admits. "If you have an established program, it's not a huge undertaking. It's something more along the lines of tweaking or adding to what you have. But if you try to jump into this with both feet without having the other necessary elements, it can be overwhelming."
OmniSource first considered applying for the program in 2001, when another local company made the news for its certification. Nolte had the responsibility of investigating the benefits of joining the program and, later, choosing a test site to see how a scrapyard could fit into the program, which encompasses hundreds of industries.
"We ended up putting as much into place as we thought we could," he says. "We made contact with OSHA shortly thereafter and investigated what they thought would benefit us." The Fort Wayne facility applied for certification in 2003, and its nonferrous division received Star status the following year. Its ferrous division received Merit status in 2005 and Star status two years later.
Reviewing the Benefits
"The benefits of VPP are somewhat ambiguous," Dunaway admits. "Once you get to the [point] where you're willing to apply for VPP, you've already committed that internal cost to a health and safety culture, program development, and so forth. Those costs are already sustained in your budget." In other words, by making all the changes it needs to qualify for the program, a company will probably reap many of the benefits VPP participation can bring before it actually gets the certification.
Even if that's the case, the money an injury prevention program can save might equal or surpass the money a company spends to get its program up to VPP standards. "We normally see throughout all VPP sites a 51-percent reduction in injuries," Dunaway says. "That leads to reduced workers' comp costs, and that hits the bottom line. You do get a return on your investment."
The other major benefit is the ability to relax about OSHA visits, which become more collaborative and less confrontational after a facility is certified. That can make a huge difference, participants say. "OSHA has a routine inspection list," Dunaway explains. "Once you join VPP, you're removed from that list. You're now a partner with OSHA, and that brings you into a very collaborative environment. Instead of getting citations, you work with OSHA to mitigate existing problems in your industry." That means little risk of fines or other penalties and less stress on employees when an agency representative shows up.
"You need to take the term 'voluntary protection program' literally," Dunaway says. "You're voluntarily being protected by entering this program, and you do reap rewards. If you fall in line with where you need to be within this culture of safety, [then] safety becomes intrinsic with daily operations, and you'll see rewards that are much larger than you would" if you were not in the VPP.
That's one aspect of the program many companies don't understand, Nolte says. "There's a misconception out there that OSHA conducts its business through the VPP the same way it conducts inspections," he says. In reality, "when they come in to assist you to achieve VPP or to evaluate your program for certification, they look at it more as a partnership. It's not them coming in and telling you everything you need to correct and everything you've done wrong, and coming down hard on you. It's the opposite of that. They come in and work with you until you reach the point of VPP certification."
VPP certification can improve not only the relationship a company enjoys with OSHA, but also its reputation in the community, Nolte adds. Spreading the word about the certification can improve the local buzz about a scrapyard and help neighbors learn about its commitment to safety and health issues.
Getting Started
Achieving VPP certification takes companywide commitment. Employees have to buy into the whole program and have a thorough understanding of what it will take for it to work. That can be a challenge, particularly when scrapyard workers see OSHA as an adversary.
OmniSource's Nolte says he found it helpful to encourage buy-in from the top down. "We went to the top of our organization and presented the idea," he says. "We moved down the chain to some of the management levels that were closer to the plant and laid out a plan to get employees to buy into the program, which is essential. We had meetings with management and then with our employees to get everybody on board and make sure everyone understood what our expected results were."
After that, he says, it was a long-term commitment on everyone's part to stay on track and earn the certification. "You've really got to keep people motivated on the goal and keep focused on the mission," he says. "It helps to show them along the way what the positive results of the program are. Once you're certified, you can expect to see some kind of reward immediately."
Dunaway says most businesses that hope to become certified will find themselves with a laundry list of things to do to qualify. Even those with an existing health and safety program will have some expenses, though the additional cost should be modest. "You're probably doing a lot of the right things anyway because they're regulatory requirements," he says. "If you have a progressive culture," you've most likely already built these costs into your budget.
"The additional cost beyond solidifying the internal build-up of staff and programs and compliance would be at the end," he says. "OSHA likes to see a celebration once you are accepted as a VPP site. It likes to see some trinkets—shirts, pins, and so forth—on the day of the on-site evaluation." A company might spend "a couple of thousand dollars on the VPP accessories and a nice lunch for all employees that day."
"It's not terribly costly," Nolte agrees. He gives this example: A VPP site must have "three meaningful ways that employees are getting involved, and one of the strongest [ways] is through a safety committee. That means taking employees out of production and operations" to serve on the committee. There also are training sessions and travel expenses to get all staff members up to speed with the requirements of the program. "OmniSource considers our efforts as an investment," he adds. Applying for and participating in the VPP program are free.
Recyclers' Reluctance
To date, OmniSource's Fort Wayne facility is the only Star-certified scrap recycling yard in the United States. Nolte and Dunaway can only speculate at what keeps other scrap companies from applying for VPP status. Small, family-owned companies might not have the resources to hire dedicated safety officers or pull employees away from their stations for the specialized training the program requires, for example. But what about the larger companies in the industry that already have sophisticated safety programs in place? Their reluctance to participate might just result from a lack of knowledge or misunderstanding of the program.
"I don't think the scrap industry is unique in this," Dunaway says, "but there's a misconception about what VPP is and how partnering with OSHA works." There's a common—and erroneous—belief that OSHA will come in and crack down on violations it finds during the certification process, for instance. That and other misconceptions can be hard to overcome, especially in companies whose past experience with the agency hasn't been terribly positive. "The view of OSHA, from an industry standpoint, is that they're industry cops, for lack of a better term," Nolte says. "They're seen as an enforcement agency. There's probably some trepidation about bringing in an enforcement agency to pick through your programs."
Dunaway expects more companies will see the value of VPP participation in time. "Fortunately, we're seeing the scrap industry respond in very positive ways to the [benefits] of including safety as an ordinary matter in the course of doing business. Of course, safety programs need to be sized appropriately to the specific location, operations, and size of a company," he points out. "The VPP may not be necessary or appropriate for all scrapyards, but I do believe we will see more and more [companies] either become involved formally [or increase] their understanding and investment in safety concerns." •
Kim Fernandez is a writer based in Bethesda, Md.
OSHA's Voluntary Protection Program has concrete benefits, from fewer accidents to exemption from regular site inspections and fines. So why don't more scrap companies participate?