Impact assessment of occupational safety and health policy

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Aditya Jain, Nottingham University Business School, and Stavroula Leka, Centre for Organizational Health and Development, University of Nottingham

Introduction

Impact assessment is a key process for setting out detailed information about the potential effects of policy measures including economic and social costs and benefits. Impact assessments allow policy makers to make informed choices on whether or not to implement a policy intervention and select an appropriate policy instrument. This article describes the process, key methodologies and tools used in impact assessment. It also presents a review of key impact assessments carried out in relation to occupational safety and health policies at the EU level and highlights the costs and benefits of the process.

Impact assessment: context

Increasing emphasis on better regulation and evidence based policy making have led to significant changes in how the European Commission and EU member states make policy and propose to regulate. Stakeholder consultations and impact assessments are now essential parts of the policy making process [1]. Impact assessment is one of the cornerstones of the better regulation agenda, both at the national and European level, aimed at the improvement and simplification of new and existing legislation consultations. Impact assessments contribute to the decision-making processes by systematically collecting and analysing information on planned interventions and estimating their likely impact. This provides the bodies involved in legislative decision-making with a basis on which to decide the most appropriate way to address the problem identified [2].

Impact assessments, as defined by the European Commission, ‘examine whether there is a need for EU action and analyse the possible impacts of available solutions. These are carried out during the preparation phase, before the Commission finalises a proposal for a new law. They provide evidence to inform and support the decision-making process.’[2]. It is an important tool to aid political decision-making, but not a substitute for it [3]. To support the process of better regulation the EU Commission has provided guidelines and a toolbox on how to carry out an impact assessment[4]. Impact assessments are now more widely used and aim at assessing the possible costs and benefits (financial, administrative, social, and environmental) of introducing different types of policies before a decision is made for the best option to be adopted [5].

Why is impact assessment important?

At the EU level, impact assessments are carried out on initiatives expected to have significant economic, social or environmental impacts. The initiatives included in the Commission Work Programme or in the joint declaration will, as a general rule, be accompanied by an impact assessment [3]. These can be:

  • legislative proposals
  • non-legislative initiatives (e.g. financial programmes, recommendations for the negotiations of international agreements)
  • implementing and delegated acts.

The findings of the impact assessment process are summarised in an impact assessment report. The impact assessment reports are accessible in the database List of impact assessments and the accompanying opinions of the Regulatory Scrutiny Board[6].

At the national level the requirement to carry out impact assessments varies. For example in the UK, impact assessments are required for all new policy initiatives and interventions, both regulatory and non-regulatory, which are likely to have an impact on businesses, the public sector and the voluntary sector. According to the Health and Safety Executive, the preparation and publication of impact assessments ensure that those with an interest understand and can challenge:

  • why the Government is proposing to intervene;
  • how and to what extent new policies may impact on them;
  • the estimated costs and benefits of proposed and actual measures [7].

The systematic impact assessment process of questioning at the beginning of the policy cycle facilitates necessary reflection on the important range of details that need to be taken into account when designing and implementing a policy intervention [8]. By strengthening the transparency of regulatory decisions and their rational justification, impact assessment contributes to strengthening the credibility of regulatory responses and increasing public trust in regulatory institutions and policy-makers [9].

The European Commission therefore aims to base all its policy-decisions on sound analysis supported by the best data available. The Commission’s impact assessment system:

  • helps the EU institutions to design better policies and laws;
  • facilitates better-informed decision making throughout the legislative process;
  • ensures early coordination within the Commission;
  • takes into account input from a wide range of external stakeholders, in line with the Commission's policy of transparency and openness towards other institutions and the civil society;
  • helps to ensure coherence of Commission policies and consistency with Treaty objectives such as the respect for Fundamental Rights and high level objectives such as the Lisbon or Sustainable Development strategies;
  • improves the quality of policy proposals by providing transparency on the benefits and costs of different policy alternatives and helping to keep EU intervention as simple and effective as possible;
  • helps to ensure that the principles of subsidiarity and proportionality are respected, and to explain why the action being proposed is necessary and appropriate [2].

The process of impact assessment

The process of completing an impact assessment is a rational policy process that is usually undertaken as a series of steps. To guide the process the European Commission has set out a series of questions that need to be answered by making the impact assessment. These key questions are: The questions an impact assessment should answer

  1. What is the problem and why is it a problem? The answer to this question should give policymakers the information needed to decide whether there is a problem for which a policy response may be warranted.
  2. Why should the EU act? The answer to this question should give policymakers the information needed to decide whether a policy response at the EU level is needed.
  3. What should be achieved? The objectives of policy action should be clearly identified, including the level of policy ambition and the criteria against which alternative policy options would be compared and the success of any initiative assessed.
  4. What are the various options to achieve the objectives? At the end of this process, the most relevant alternative policy options should have been identified for further examination in the impact analysis stage.
  5. What are their economic, social and environmental impacts and who will be affected? At the end of this process, policymakers should know to what extent different policy options would meet their objectives, with what benefits, at what cost, with what implications for different stakeholders, and at what risk of unintended consequences.
  6. How do the different options compare (effectiveness, efficiency and coherence)? At the end of this process, the IA should present the relevant information for policymakers to make a choice and, where appropriate, suggest a preferred option.
  7. How will monitoring and subsequent retrospective evaluation be organised? At the end of this process, policymakers should know how the policy will be monitored and evaluated, allowing for future policy-adjustments whenever needed. [10].

The complexity and depth of the analysis that is required is determined by the importance and size of the impact of the policy issue [11]. There are a several guidance documents available on how to complete an impact assessment [4] [9], in most cases however, the steps of an impact assessment, as depicted in the Figure, include:

Source: Adapted from: OECD[9]
  1. Definition: This first step involves identifying the problem and defining the policy context and objectives. It includes describing of the nature and extent of the problem, setting objectives that correspond to the problem and its root causes, identifying the key players/affected populations and establishing the drivers and underlying causes. A clear baseline scenario is usually developed, using methods of sensitivity analysis and risk assessment.
  2. Identification: The second step involves the identification and definition of all possible regulatory and non-regulatory options that will achieve the policy objective.
  3. Analysis: The third step involves the identification and quantification of the impacts of the options considered, including costs, benefits and distributional effects.
  4. Consultation: Public/stakeholder consultation should be systematically incorporated to provide the opportunity for all stakeholders to participate in the policy process. This provides further important information on the costs and benefits of alternatives, including their effectiveness.
  5. Design: The policy design begins with the development of enforcement and compliance strategies for each policy option followed by an evaluation of their effectiveness and efficiency. This involves a comparison of the policy options by evaluating their positive and negative impacts on the basis of criteria clearly linked to the objectives. The process ends with the development of monitoring mechanisms to evaluate the success of the policy proposal.

It is important to note that the exact process of impact assessment may vary and some steps may overlap or be broken down further depending on the context, the nature of the problem and the impact assessment strategy being used.

Analysis of impacts

Analysis of impacts of potential policy options is at the heart of the impact assessment process. It has evolved from being associated with a strict cost benefit analysis to an analytical philosophy also able to incorporate social and environmental concerns [12]. The impact assessment process initially consisted of mainly a benefit-cost analysis of the policy proposal and a requirement to analyse the specific impacts on small business and competition as was one of the standard pieces of information considered in political decision making in some EU member states. However, the way economic assessment influenced decision-making varied from one Member State to another. It has since expanded to include a range of specific impact assessments relevant to the policy context which may include legal aid impact assessment, race equality impact assessment, health impact assessment, sustainable development, regional impact assessments and small business impact assessments [13]. Within the EU legislative process, the impact assessment comprises a broad range of impacts divided into 3 main categories (table) [14].

Table - Overview of key impacts to be screened (source [14])

Economic Social Environmental
Macroeconomic environment Employment The climate
Competitiveness, trade and investment flows


Working conditions


Efficient use of resources (renewable & non-renewable)
Operation/conduct of SMEs


Income distribution, social protection and social inclusion (of particular groups) Quality of natural resources/fighting pollution (water, soil, air etc.)


Regulatory burdens on business


Public health & safety and health systems


Biodiversity, including flora, fauna, ecosystems and the services they provide and landscapes
Increased innovation and research Job standards and quality


Reducing and managing waste
Technological development / Digital economy


Education and training, education and training systems Minimising environmental risks


Third countries and international relations Crime, terrorism and security


Protecting animal welfare


Functioning of the internal market and competition Preserving the cultural heritage / multi-lingualism International environmental impacts
Energy independence


Governance and good administration
Deeper and fairer economic and monetary union
Consumers and households
Property rights
Public authorities (and budgets)
Economic and social cohesion (specific regions and sectors)
Impacts in developing countries
Sustainable development
Fundamental Rights

• Dignity

• Freedoms

• Gender equality, equality of treatment and opportunities, non-discrimination, rights of persons with disabilities.

• Solidarity

• Citizens' Rights

• Justice

In relation to occupational safety and health policies. The role of legislation in occupational safety and health management, likely economic impact includes positive and negative effects of potential policies on direct and indirect costs for businesses in relation to implementation and compliance, potential impact on innovation, administrative requirements at the company and policy level, impact on budget expenditures of public authorities such as labour inspectorates, national health and safety institutes and potential impacts on specific sectors or regions and health care costs. Social impact may include direct impact on health and safety of workers, changes in employment levels and labour market conditions, impact on quality of working life including standards and rights related to job quality, changes affecting gender equality, equal treatment and opportunities, non-discrimination, impact on education and training of workers and health and safety culture within the organisation and also at the societal level. The impact assessment of the Community strategy 2007-2012 on health and safety at work states that occupational health and safety policies can also have an impact on the environment. Therefore possible interactions should be carefully considered when designing individual policy action or practical solutions and the possible synergies should be harnessed in the policy-making process [15].

The analysis of impacts begins with an identification of potential economic economic, social and environmental impacts and is followed by a qualitative assessment of the more significant impacts[14]. To complement the qualitative assessment, an in-depth qualitative and quantitative analysis of the most significant impacts is carried out. Quantification and/or monetisation of the policy options wherever possible allows the estimation of costs associated with the proposal but also its expected benefits over time. Thinking in terms of costs-and benefits of the various options provides a powerful framework for the analysis. The most relevant methods for comparing options that can be used in this respect as recommended by the European Commission [16] are:

  • Cost-benefit analysis (CBA) entails the monetization of all (or the most important) costs and benefits related to existing public intervention or all viable alternatives at hand.
  • Multi-criteria analysis is a technique to reach a judgement based on an explicit set of objectives and associated criteria699. It is particularly useful in case of complex interventions with diverse quantified impacts measured in different units and/or qualitative impacts (in particular factors which cannot be expressed in monetary terms).
  • Least cost analysis is primarily used in the impact assessment context. It only looks at costs, in order to select the alternative option that entails the lowest net cost.
  • Cost-effectiveness analysis (CEA) entails quantifying (not monetising) the benefits that would be generated by one Euro of costs imposed on society. While CEA is closely related to CBA, instead of monetised benefits it uses other measures such as increased life expectancy, educational attainment, emissions abated etc.
  • Counterfactual analysis is a statistical method devoted to quantifying whether a given intervention produces the desired effects on some pre-established dimension of interest.
  • SWOT analysis is used to identify the Strengths, Weaknesses, Opportunities and Threats in relation to a project/organisation and how such an assessment will change over time.

Key impact assessments carried out in relation to OSH in the EU

A number of impact assessments on both regulatory and non-regulatory occupation safety and health policies have been carried out in Europe, at the level of the European Commission (including its agencies and related institutions) and also by member states on national policies. The impact assessments carried out in relation to occupational safety and health policies at the European level can be accessed through the database available at the EU-website [6]

Impact assessments of OSH strategies and regulations have led to a number of results and outcomes such as the development/revision of Directives, further consultation with the social partners and key stakeholders and as well as decisions to delay or take no further policy action. Some examples of such results include the impact assessment carried out prior to the development of the Community Strategy on Health and Safety at Work for 2007-2012 [17].

Another example is of an impact assessment which addresses the protection of workers exposed to high levels of electromagnetic fields (EMF) during their work. This concern forms part of the general EU policy set out in the Treaty on the Functioning of the European Union (TFEU) to provide workers appropriate health and safety protection against risks encountered during their professional activities. On the basis of the results of the impact assessment, the European Commission concluded that a new directive with revised exposure limits and partial exemptions was its preferred policy option and in June 2011, presented the proposal for a directive of the European parliament and of the Council amending Directive 2004/40/EC on minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields) (eighteenth individual Directive within the meaning of Article 16(1) of Directive 89/391/EEC) and anticipated the adoption of the new Directive by 30 April 2012 [18]. However, given the technical complexity of the subject matter, a new Directive was not adopted; rather Directive 2004/40/EC was amended by directive 2012/11/EU of 19 April 2012 extending the deadline for transposition to 31 October 2013 [19].

An example of an impact assessment which led to the development of a new directive was in relation to the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation. Following an extended impact assessment, in April 2004, the European Commission proposed a Directive of the European Parliament and of the Council. The proposal suggested three policy options. Policy option 1, suggested a pure codification of existing legislation which would be no more than a technical exercise without adding anything new to the existing Community acquis. Option 2 which proposed a simplification, modernisation and improvement by amalgamating and amending selected Directives into a new and single recast Directive and would be an extension of the provisions of Directive 2002/73 on the newly integrated Directives on equal pay, occupational schemes and the burden of proof. While under policy option 3 all maternity related employment rights, like the prohibition of dismissal, maintenance of payment and/or entitlement to an adequate allowance, night work, maternity leave, time off for ante-natal examinations was proposed to be included. The principal objective to be reached with this proposal was to enhance transparency and clarity of equal treatment legislation and to facilitate the effective application of legislation by reinforcing the acquis and avoiding regression at the same time [20].

On the basis of the results from the impact assessment and stakeholder consultations, the Commission proposed policy option 2 as the most suitable, as it made full use of the possibilities towards simplification, modernisation and improvement of the present acquis by combining the Directives to one comprehensive Directive dealing with the subjects it covers in different chapters and thus reflecting that there is one single piece of equal treatment legislation, covering issues that are linked to each other and combined under common principles and definitions as well as including new and fundamental judgements of the ECJ and thus make it easier for the citizen to get better orientation about important issues of material law in the field of equal treatment. Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) was published on 5 July 2006, repealing the individual Directives and their successive amendments [21].

A comprehensive ex-post evaluation of the European Union occupational safety and health directives has been published in 2017 [22]. The ex-post evaluation covered the implementation of the OSH framework in 27 Member States and 24 Directives. The evaluation was based on data analysis, a consultation process, a study on the directives, national reports, ... In overall terms, the evaluation suggested that EU OSH legal framework remains relevant although it proved difficult to evaluate the full impact of the OSH framework because of the lack of (some) data and the difficulties in differentiating between the impact of the EU legislation and the national legislation as well as other factors (non-OSH legislation, technological progress, structural changes in the labour markets, socio-economic developments etc.). As to the costs of the EU OSH framework, the evaluation confirmed that on the basis of the available information, administrative and substantive compliance costs vary considerably across Member States and are presumed to be higher per employee in SMEs.[22]. More details on the impact of the OSH legislation in the member states is available in the national reports that served as a basis for this ex-post evaluation. The overall conclusions of these national reports as well as summaries are available in [23].

Advantages and disadvantages of carrying out impact assessments

To ensure that new legislation is the best proposed the European Commission has put in place an impact assessment system to prepare evidence for political decision-making and to provide transparency on the benefits and costs of policy choices. A key element of this system is the Regulatory Scrutiny Board. The board was established in 2015 and replaced the Impact Assessment Board (IAB), established in 2006. The Board provides independent quality control and quality support for Commission's impact assessments. The Board examines and issues opinions on the quality of draft reports relating to impact assessments, developed during the preparation of new initiatives. For these initiatives, the positive opinion from the Board is needed in order to be tabled for adoption by the Commission. In case of a negative opinion, the draft report must be reviewed and resubmitted to the Board. The opinion accompanies the draft initiative together with the impact assessment throughout the Commission's political decision-making [24]. The opinion from the Regulatory Scrutiny Board is also published and can be accessed in the database [6]. The Regulatory Scrutiny Board also issues opinions on major retrospective evaluations of a single policy or law, and fitness checks of multiple policies and laws. Reports of evaluations and fitness checks and the related Board opinions are also published online [24]. Increasing number of impact assessment reports submitted to the Board indicates that the impact assessment process is well embedded in the Commission’s working methods.

Evaluation studies indicate that impact assessments in Europe have increased transparency and accountability, and promoted evidence-based policy making and therefore improved quality of new legislation. Furthermore, the Regulatory Scrutiny Board reports that the quality of the impact assessments improves steadily. The progress made is also due to the work of the Board. An analysis of a random sample of reports from 2017 and 2018 suggests that the quality of impact assessments is higher when the final report takes into account issues that the Board raised [25].

A report from the OECD, using examples from a sample of OECD countries using impact assessment techniques, highlights that national policy-making in member countries has been improved due to the use of impact assessments and policy making has increasingly become based on more empirical analysis. Impact assessments have improved evidence based analysis and transparency, facilitating more justified policies and assisting in legitimating regulators’ decisions. At the same time they have granted more flexibility to the decision making process confronting rapid changing environments. However, the report acknowledges that increase in benefits as a consequence of impact assessments was difficult to aggregate across countries due to the lack of comparable empirical data [13]. The European impact assessment system has also been reported to achieve its objective of enhancing both external and internal communication enhancing openness and transparency of the policy development process and on improving co-ordination within the Commission [26].

Even though the use of impact assessment has proven to be useful for several governments and the European Commission, practice varies widely across nations and agencies [26]. Furthermore, not everyone agrees that impact assessments particularly cost-benefit analysis is justified or useful. Ackerman and Heinzerling, for instance, regard cost-benefit analysis as morally obtuse, a recipe for capitulation to powerful industries and ultimately for deregulation. They claim that cost-benefit analysis of health and environmental policies trivialises the very values that gave rise to those policies in the first place. Moreover, through concepts like willingness to pay, quality adjusted life years, and discounting, economic analysts have managed to hide the moral and political questions lying just under the surface of their precise and scientific-looking numbers [27]. Such researchers believe that impact assessments solely focusing on quantification and monetisation it is a form of pseudo-science, with the pernicious effect of blinding us to the real values at stake. According to them, human lives are priceless, and deaths are not mere costs. They emphasise that the use of techniques such as cost benefit analysis must be used appropriately and in a transparent manner [5].

Conclusion

It is important to reiterate that impact assessment is an important tool to aid political decision-making, but not a substitute for it [2]. Impact assessments may contribute to policy success and continued efforts are being made to improve impact assessments through better assessment of trade-offs and inter-linkages between impacts; improved quantification and a possible further monetisation of impacts; improved guidance on estimating administrative requirements; and improved consideration of different time horizons (short, long term and dynamics) in the assessment. In additional to economic impact, it is also important to analyse social and environmental impact. The EU Commission has developed specific guidance and tools for carrying out impact assessments. The Commission recognises that impact assessments should quantify benefits and costs in all three areas when possible and will continue efforts to improve in this area [2], by taking into consideration recommendations by the Regulatory Scrutiny Board on the need to provide better guidance and support to improve the quantification of costs and benefits, by encouraging various agencies to ensure that modelling and estimations are based on robust data sets, realistic assumptions and sound methodologies, all of which must be transparently explained [26].

References

  1. EU Commission, Better regulation: why and how. Retrieved 6 February 2020 from [1]
  2. 2.0 2.1 2.2 2.3 2.4 EU Commission, Impact assessments. Retrieved 6 February 2020 from [2]
  3. 3.0 3.1 Interinstitutional agreement of 13 April 2016 between the European Parliament, the council of the European Union and the European Commission on better law-making. Retrieved 6 February 2020, from: [3]
  4. 4.0 4.1 EU Commission, Better regulation: guidelines and toolbox. Available at: [4]
  5. 5.0 5.1 Torriti, J., ‘(Regulatory) impact assessment in the EU: A tool for better regulation, less regulation, or less bad regulation?’, Journal of Risk Research, Vol. 10, No 2, 2007, pp. 239–276.
  6. 6.0 6.1 6.2 EU Commission, List of impact assessments and the accompanying opinions of the Regulatory Scrutiny Board. Available at: [5]
  7. HSE – Health and Safety Executive (2011). Impact assessments. Retrieved 18 June 2012, from: [6]
  8. OECD – Organisation for Economic Co-operation and Development, Building a framework for conducting Regulatory Impact Analysis (RIA): Tools for policy-makers, 2007. Available at: [7]
  9. 9.0 9.1 9.2 OECD – Organisation for Economic Co-operation and Development, Building an Institutional Framework for Regulatory Impact Analysis (RIA): Guidance for Policy Makers, 2008. Available at: [8]
  10. EU, Commission, Guidelines on impact assessment. available at: [9]
  11. Rodrigo, D., Regulatory Impact Analysis in OECD Countries: Challenges for Developing Countries, Organisation for Economic Co-operation and Development, Paris, 2007. Available at: [10]]
  12. Lofstedt, R.E., ‘The swing of the regulatory pendulum in Europe: From precautionary principle to (regulatory) impact analysis’, Journal of Risk and Uncertainty, Vol. 28, No 3, 2004, pp. 237–260.
  13. 13.0 13.1 OECD – Organisation for Economic Co-operation and Development, OECD Reviews of Regulatory Reform: Regulatory impact analysis a tool for policy coherence, 2009. Available at: [11]
  14. 14.0 14.1 14.2 EU Commission, Better regulation Toolbox, Toolbox 19 Overview of key impacts to be screened. Available at: [12]
  15. EC – European Commission (2007). Improving quality and productivity at work: Community strategy 2007-2012 on health and safety at work Executive summary of the Impact Assessment. SEC(2007) 216/2. Retrieved 18 June 2012, from: [13]
  16. EU Commission, Better regulation Toolbox, Toolbox 57 Analytical tools to compare options or assess performance. Available at: [14]
  17. EC – European Commission (2007). Communication on the Community strategy 2007-2012 on health and safety at work COM(2007)62. Retrieved 26 October 2012, from: [15]
  18. EC – European Commission (2011). Proposal for a directive of the European parliament and of the Council amending Directive 2004/40/EC on minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields) (eighteenth individual Directive within the meaning of Article 16(1) of Directive 89/391/EEC) COM(2011)348. Retrieved 26 October 2012, from: [16]
  19. EC – European Commission (2011). Proposal for a directive of the European parliament and of the Council amending Directive 2004/40/EC on minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields) (eighteenth individual Directive within the meaning of Article 16(1) of Directive 89/391/EEC) COM(2011)348. Retrieved 26 October 2012, from: [17]
  20. EC – European Commission (2004). Proposal for a Directive of the European Parliament and of the Council on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast version) COM/2004/0279. Retrieved 26 October 2012, from: [18]
  21. Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast). Retrieved 26 October 2012, from: [19]
  22. 22.0 22.1 EU Commission, Commission staff working document, Ex-post evaluation of the European Union occupational safety and health Directives (REFIT evaluation) (2017 SWD 10). Available at: [20]
  23. EU Commission, DG Employment, Social Affairs and Inclusion, Evaluation of the Practical Implementation of the EU Occupational Safety and Health (OSH) Directives in EU Member States, Main report, 2015. Available at: [21]
  24. 24.0 24.1 EU Commission, Regulatory Scrutiny Board. Retrieved 6 February 2020 from [22]
  25. Regulatory Scrutiny Board? Annual report 2018. Available at: [23]
  26. 26.0 26.1 26.2 TEP – The Evaluation Partnership (2007). Evaluation of the Commission’s Impact Assessment System. Retrieved 18 June 2012, from: [24]
  27. Ackerman, F. and Heinzerling, L. Priceless: On Knowing the Price of Everything and the Value of Nothing, The New Press, New York, 2004.

Links for further reading

EU-OSHA - European Agency for Safety and Health and Work, The value of occupational safety and health and the societal costs of work-related injuries and diseases. Available at: [25]