Jakko van Kampen, Erika Ustailieva, TNO, the Netherlands
- 1 Introduction
- 2 What is a ‘contractor chain’?
- 3 Potential effects of contractor chains on occupational safety and health
- 4 Companies’ approaches to improving OSH in contractor chains
- 5 Effectiveness
- 6 References
According to the global trends report 2013 the distributed networks and collaboration are becoming more important, not only to address global issues, but also to create value in a world where consumers and customers demand solutions and experiences, and increasingly develop tools in order to create value themselves, potentially redefining whole markets . Modern organisations almost always work together with other (partner) organisations in order to achieve their goals. Tasks get subdivided between companies with each company specialising in a particular expertise. All these companies have to cooperate not only effectively but also safely on a common task and often at the same location. In the relevant EU and national legislation companies have a legal obligation to work together effectively with respect to occupational safety and health.
What is a ‘contractor chain’?
It is common for construction work, cleaning, maintenance waste disposal or catering to be organized into short-term projects. The short-term nature of these projects implies that employees are only temporarily needed. Therefore, specialised companies (contractors) are hired to perform the tasks better, faster and usually cheaper   This kind of relationship is called ‘outsourcing’. The contractors are external companies, organisations or individuals that have a contractual relationship with the client. The client (or host company) is the party that outsources the task. Not only do clients hire contractors, these contractors can hire sub-contractors and a chain of companies emerges. Thus, a sub-contractor is a third company contracted by a contractor . The executed work can take place mostly at the premises of the host company/organisation (for example when contractors are hired to revise industrial installations) or at a project site (for example during building projects). The contractors’ chain comprises a flow of people and their services (i.e. contracting and sub-contracting). In this chain companies are linked together through information, knowledge, people and capital flows .
Contractor chains are a specific type of company chain with relevance for safety and health. Supply chains related to chemical substances are another example. In these long international supply chains companies communicate about the permissibility of specific uses of chemical substances (e.g. REACH supply chain communication).
Figure 1: A contractor chain with some common actors
Source: Overview by the authors
Potential effects of contractor chains on occupational safety and health
There are several potential effects of working with contractor chains on occupational safety and health. It can be argued that task division and contractor specialisation could lead to greater expertise and greater knowledge of specific risks on the work floor. This knowledge however cannot be expected to extend beyond risks that are specific to the contractors’ own given task. Risks that differ for each worksite or risks that arise from tasks conducted by other (sub-)contractors need to be managed within the contractor chain. When contractors perform their job in the client’s facilities they can be exposed to unknown hazards, like chemical products, asbestos, etc. Vice versa the employees of the host company can also be exposed to hazardous situations derived from the work performed by contractors . The occupational safety and health risks in the contractors’ chains are discussed in a number of EU-OSHA reports      
There is evidence that working with contractor chains carries specific (types) of risks for safety and health. Included are two examples of (fictional) accidents explicating ways in which (cooperation within) the contractor chain influenced occupational safety:
Example: A self-employed roofer works primarily for the same contractor. He is also occasionally hired directly by clients or through other contracting companies. One day he is asked by the contractor to repair an urgent leak. Once on site he is urged by the building’s user (who rents but does not own the building) to make sure the leak is fixed as quickly as possible. The building’s owner did not fit a permanent fall protection system on the roof. The self-employed worker decides to work without fall protection, slips in the rain and falls from the roof.
Example: An energy production plant is stopped for repair works. Many different contractors have been brought in to complete all the needed tasks. The pressure on completing the work is very high. Shareholders have pressured the organisation which has in turn set an ambitious target for completing all tasks. One contractor is using a company crane in a factory hall. A second contractor has placed scaffolding in that same factory hall in order to paint supporting struts. The crane driver employed by the first contractor accidentally steered the crane into the scaffolding that was being used by the second contractor. Plans for cooperation between both contractors were made but were not evaluated seriously.
In both examples multiple actors in the contractor chain play a role in the eventual safety on the work floor. The energy company for example may not be the direct employer of any of the directly involved employees but it did set two companies to work on its premises without making sure they worked together effectively. There are many more examples of situations in which contractor chains have proved relevant to the occurrence of accidents, for example through a lack of coordination and communication or when contractual conditions do not leave room for proper OSH measures to be taken. Relevant actors for chain-safety problems can also be much more distant to the actual work such as traffic control in road works projects. Determining the extent to which different parties bear (legal) responsibility after an event can be the subject of much discussion and debate. From a safety management point of view however it is much more useful to proactively identify opportunities for companies who work in contractor chains to improve cooperation and coordination on health and safety issues.
Influential actors and their contractor-chains
In some specific cases cooperation within a contractor chain can have a positive effect on the occupational safety and health practices of some of the participants. This is the case when influential actors, usually bigger client companies or public bodies pose requirements to their contractors for better OSH performance. These powerful actors are mainly driven, according to the literature, by requirements set in EU and national legislation, such as the EU Framework Directive 89/391/EEC, Construction Sites Directive 92/57/EEC, and Procurement Directives for public bodies ( Directives 2004/17/EC and 2004/18/EC    . Another important driver is reputation-risk, especially for companies working on big projects with high visibility, where OSH problems at their or a contractor’s company can have serious consequences for the company’s reputation . Another trigger can be the company’s sustainability/CSR agendas, and external pressure from NGOs, governments and customer’s demand can also play a role. As a result some big companies consider it important to work together with contractors and sub-contractors in order to improve OSH practices.
Companies’ approaches to improving OSH in contractor chains
There are numerous approaches to improving OSH in the contractor-chain. The most prominent approach followed, which is used most extensively, is the use of management and certification systems. Other approaches focus more broadly on issues such as long-term cooperation, communication and safety culture. In this section we will first discuss management and certification systems and then some of the other approaches.
Management and certification systems
Certification systems for contractors are private, voluntary, third-party certification regimes developed in a business-to-business environment. Such kinds of schemes allow contractors and sub-contractors to independently demonstrate to their clients that they are working according to the safety and health (and environmental) standards of the industry. Certification systems arose in part as an attempt to standardise the many different sets of requirements that clients began to put forward to their contractors, to prevent a situation whereby contractors had to conform to all sorts of different client-specific safety requirements with similar aims but (slightly) different implementations. Safety certification schemes have become important instruments with regard to the improvement of OSH practices in the contracting chain. Safety certification schemes are developed for companies, individuals or intermediate organisations (agencies). Some of them are:
- The VCA system ('Veiligheid (Gezondheid Milieu) Checklist Aannemers') or in English SCC or 'Safety (Health Environment) Checklist (or Certificate) Contractors'). The system was first developed in the Netherlands in 1994 and has been introduced in other EU Member States such as Belgium, Germany, Austria and Switzerland. The system allows certification on three levels (basic, advanced, and petrochemical) for both basic building contractors and advanced industrial contractors. The system includes a training requirement for employees. A number of similar certification systems have been developed in different countries and sectors (e.g. MASE, CAPS, SSC).
- Dutch railways owner Prorail recently introduced a certification scheme which not only certifies on management system performance but also includes aspects of safety culture and safety awareness as well.
- There are also certification schemes for individuals – so called safety passport schemes. These are simple schemes ensuring that only workers with sufficient competence in OSH are allowed to work. This system is especially useful for workers and contractors who work in more than one industry or firm.  A relatively new development is to tie this into more complicated schemes for personnel certification which look not only at OSH competencies but also at job competencies in general (see ISO 17024)
- A well–known certification system designed for the certification of the safety management systems of temporary employment agencies and intermediaries is a 'Safety and Health Checklist Temporary Employment Agencies and Intermediaries' (SCT) (in Dutch: Veiligheid en Gezondheid Checklist Uitzendorganisaties or VCU). It is intended for the secondment of personnel to clients stipulating an SCC certification and companies with an SCC certification. And another recently introduced system is the 'Safety Checklist Principles' (SCP) (in Dutch: 'Veiligheid Checklist Opdrachtgevers', VCO). This scheme, which originates from the Netherlands and is also applied in Belgium, allows the better management and coordination of SCC certified contractors.
The existence of different national and sector specific safety certification schemes for contractors can cause a problem because it can be seen as confronting the industrial globalisation and the free movement of labour and services within the European market. The EU-OSHA report on promotion of OSH in the supply chain presents a case study on the initiative of Netherlands, Belgium, France, Germany and Austria to establish a European platform of the governing bodies from the SCC and/or other safety certification schemes in these countries. The main objective of this platform is to establish criteria for mutual recognition of the different national contractor certifications .
Other approaches to improving OSH practices in the contractor chain
There are also other approaches to improving OSH within the contractor chain. Drupsteen et al inventoried relevant approaches and grouped them in the following categories at which improvements were aimed  . Further, the EU-OSHA report on promotion of OSH in the supply chain refers to a great deal of literature that addresses several other approaches that contribute to diminishing work accidents and work-related diseases. These approaches, elaborated in more detail below, focus their attention on issues such as contractual clarification of responsibilities and planning, communication, cooperation and training, joint control procedures and contractor evaluation.
- Contractual clarification of responsibilities and planning – clear definition of responsibilities from an early stage of the contract is necessary, since all involved parties have legal obligations under health and safety law. Also the contract should contain OSH information on the potential hazards, the measures that have been taken to eliminate or limit them, those precautions that still need to be taken, and a description of safe behaviours    . Last, but not least, a committed safety leadership at all levels regarding OSH is important to ensure safety and health performance and respect for the terms of contracts  .
- Prevent financial competition between contractors on safety aspects by including explicitly the safety measures that need to be included in the call for bids.
- Identify potential conflicts between the work planning of different contractors in the planning stage such as activities scheduled at the same time and location. Software tools such as building information models and project management tools can help with this task.
- Draft contractor specific and overarching project health and safety plan which includes all project activities and potential areas of conflict between contractors.
- Communication, cooperation and training – continued cooperation between client contractor and sub-contractor helps implementing a joint safety and cooperation culture  . The client company should inform their workers about the presence of contractors/sub-contractors at the location and the tasks they are performing. At the other end it should also inform the (sub-)contractor workers about their own safety procedures, as well as any risks related to the task and preventive measures that have been taken. In fact, cooperation between client and (sub-)contractors improves common knowledge, awareness and understanding of activities, responsibilities and risks     Training and education on OSH issues helps align standards and procedures between client and contractors, harmonising safety culture and improving OSH performance  . For example, at many large companies, particularly those with high risks, employees and contractors/sub-contractors are obliged to follow a short company-specific safety training and pass a small test before entering the site and start working. These trainings are mostly by means of a short film or e-learning. It can also be considered to set minimum requirements for language spoken for all personnel.
- Establish as far as possible a safety culture which is shared by the different parties within the contractor chain. For example, by fostering a longer term cooperation with a limited number of companies and measuring and improving safety culture across the chain of cooperating companies using the multitude of tools that are available.
- Joint control procedures – the adoption of the same standards and procedures among client and contractors/sub-contractors improves OSH performance   
- Contractor evaluation – evaluating contractors in a systematic way can lead to better OSH performance. This can be organised in different ways, for example the evaluation can be based on a set of predefined criteria, which don't need to be focused only on OSH matters (it could also include quality of delivered service, etc.). For these criteria a questionnaire (checklist) can be drawn up. The timing and frequency of evaluation depends on the type of contract with the contractor concerned. For example, in long-term contracts a periodical evaluation is necessary. For one-time contracts an evaluation is necessary at the end of the contract. Based on this evaluation contractors can be classified in predefined categories. These categories can, for example, be used as a basis as incentives for contractors, such as reward by higher score for future tenders.
There are only limited systematic studies that have been conducted to evaluate the effects of interventions to improve contractor safety. Some reports are available on the effectiveness of safety management systems. The effectiveness of safety management systems can be examined from both a ‘structural performance’ and ‘operational performance’ . When looking at structural performance the focus is on administrative processes and compliance, operational performance is more related to the practical effectiveness of the certification system in the field.
There are some case studies that show the effectiveness of certification systems, e.g the Belgacom case presents in a recent EU-OSHA report. According to the authors of the case as a result of the introduction of the VCO/SCP system and the related certification in Belgacom, a genuine cultural change was noticeable as far as safety is concerned. It also pointed out that VCA/SCC and VCO/SCP are much more practical and concrete than systems such as OHSAS 18001. With VCA/SCC and VCO/SCP, the auditor not only checks the documents, but also actually goes into the field. The VCA database shows a marked decrease in reported number of incidents in the participating companies over time up to a factor of 3 from 1998 till 2011 .
These assessments, however, have considerable limitations. Improvements may be achieved by managing formal compliance rather than actual performance/excellence. For example a lower incident rate may mean that companies are suppressing (intentionally or unintentionally) incident reporting rather than reducing the actual number of incidents. In addition, when evaluating certification systems as a whole, it is very difficult to untangle the effects of the certification scheme from other simultaneous developments (e.g. technical improvements; overall increased attention). Finally, if a certification system is successful it then becomes very difficult to find a suitable group of ‘control companies’ who did not institute a certification system but are otherwise comparable.
In conclusion, There are indications that certification systems are effective. However, the evidence is limited.
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