What did we learn from the State Comptroller's report on work accidents in the construction industry?
Dec 28, 2022
By: Attorney Lior Akai
The State Comptroller's Office recently joined forces to combat workplace accidents in the construction industry as part of a comprehensive audit operation that spanned approximately 10 months of intensive activity, both qualitatively and quantitatively. Various aspects of the state's activity on the subject were examined, focusing on a number of relevant bodies:
· Registrar of Contractors - How does the Registrar of Contractors treat contractors who have committed safety violations?
· The Safety Administration – How does the Safety Administration enforce compliance with the safety regulations that apply to employers in the industry?
· Police investigation units - How effective are police investigation units in investigating relevant offenses regarding safety in the construction industry?
· The Accountant General - Does the Accountant General act effectively against contractors who have violated safety regulations?
· Implementation of the Comptroller's Report - Have deficiencies noted in the previous State Comptroller's report from 2018 been corrected?
The audit period has ended, the data has been processed, and the State Comptroller published a comprehensive report on the matter in April 2022. As an insurance agency that has been involved in construction insurance for over 30 years, and which has made it its mission to place a permanent spotlight on the issue of safety in the industry, we saw fit to present to you the main findings from the Comptroller's report. Including a brief overview of the Comptroller's recommendations for further handling of this difficult phenomenon.
The Safety Administration's staffing has increased but is still insufficient – The auditor notes that there has been an increase in the number of staffed positions in the Safety Administration in the period between January 2019 and January 2021. From 95 staffed positions to 148 staffed positions. However, it was emphasized that there are still approximately 30 positions that have not been staffed despite being specified in the standard and 7 positions that were supposed to be added but were not added (despite a 2018 agreement with the Ministry of Finance).
There is no mechanism for monitoring notices to correct construction defects – as is known, the inspector on behalf of the Safety Director may refrain from issuing an order and suffice with notifying the employer of a repair that needs to be repaired. The State Comptroller found that there is no clear mechanism for monitoring the implementation of the above notices (including reminders or characterization of alerts in the computer system).
Increase in the number of orders – The auditor found a significant increase in the number of orders issued by the Safety Administration against employers on construction sites. For example, approximately 5,800 orders in 2020 compared to only about 900 in 2017 and an increase of about 43% in work stoppage orders during the same period. These figures further emphasize the need to improve monitoring to correct deficiencies.
Financial sanctions – The State Comptroller notes that although the fight against occupational accidents is a national task, there has been no effective increase in the scope of financial sanctions imposed by the Safety Administration on contractors. The number of sanctions in 2020 was the same as in 2018, and in 2019 there was even a decrease of about 75%. The Comptroller's report indicates that about 20% of contractors in Israel "accumulated" between three and ten financial sanctions in the period between 2018 and 2020.
Collecting financial sanctions from contractors – A financial sanction is not effective without its collection. The State Comptroller's report indicates that the Safety Administration managed to collect less than a third of the financial sanctions imposed on contractors between 2018 and 2020. More than 70% of the sanctions imposed are still "in the bureaucratic corridors" being processed by the administration, which tracks them - among other things - manually in Excel spreadsheets.
Criminal aspects – The auditor criticizes the fact that by the end of 2021 there was no activity at all of a dedicated criminal investigations unit in the Safety Administration. This is despite the attitude of many professionals that the activity of such a unit is critical. Despite the high volume of violations at the sites, between 2018 and 2020, fewer than 30 investigations were opened.
Need to improve lessons learned processes – The auditor notes that although the Safety Administration holds important data for dealing with work accidents on construction sites in Israel, no data has been collected that would allow for a fruitful process of learning lessons. The auditor emphasizes, for example, that the Safety Administration does publish data on fatal work accidents in the annual report, but does not collect data on other accidents and serious (more or less) cases of "near misses." Similarly, the police unit's investigations into these issues (the PLA faction) are not transferred for learning and assimilation.
Suspension of Contractors – The procedure for suspending contractors from contracting with government ministries following safety violations does not appear to be having the desired effect. According to the State Comptroller's inspections, out of 20 cases that were referred to the Accountant General, suspension processes were initiated in only four of them, and even here three were frozen for "reexamination."
The main findings in numbers
Staffing at the Occupational Safety Administration has increased but remains insufficient: The State Comptroller notes that the number of filled positions at the Administration rose from 95 in January 2019 to 148 in January 2021. However, approximately 30 authorized positions remained vacant, and seven additional positions were never added, despite a 2018 agreement with the Ministry of Finance.
No mechanism for tracking notices to rectify construction site deficiencies: Inspectors from the Occupational Safety Administration may choose to issue an employer a notice requiring corrective action instead of a formal order. The State Comptroller found no clear mechanism for monitoring compliance with these notices, including reminders or defined alerts in the computer system.
An increase in enforcement orders: The State Comptroller found a significant increase in the number of orders issued by the Occupational Safety Administration against employers at construction sites. For example, approximately 5,800 orders were issued in 2020, compared with just 900 in 2017. The number of stop work orders also increased by approximately 43% over the same period. These figures further highlight the need to improve follow up on corrective action.
Financial penalties: The State Comptroller notes that, although preventing workplace accidents is a national priority, there has been no meaningful increase in the number of financial penalties imposed on contractors by the Occupational Safety Administration. The number imposed in 2020 was the same as in 2018, while 2019 saw a decrease of approximately 75%. The report indicates that approximately 20% of contractors in Israel accumulated between three and ten financial penalties between 2018 and 2020.
Collection of financial penalties from contractors: A financial penalty is ineffective unless it is collected. According to the State Comptroller’s report, the Occupational Safety Administration collected less than one third of the financial penalties imposed on contractors between 2018 and 2020. More than 70% remained tied up in administrative procedures, with the Administration tracking them partly through manually maintained Excel spreadsheets.
Criminal investigations: The State Comptroller criticizes the fact that, through the end of 2021, no dedicated criminal investigations unit was operating within the Occupational Safety Administration, despite many professionals considering such a unit essential. Despite the high number of violations at construction sites, fewer than 30 investigations were opened between 2018 and 2020.
A need to improve processes for learning lessons: The State Comptroller notes that, although the Occupational Safety Administration holds valuable data for addressing construction site accidents in Israel, it has not consolidated that information in a way that supports an effective process for learning lessons. For example, although the Administration publishes figures on fatal workplace accidents in its annual report, it does not consolidate data on other accidents or on near misses of varying severity. Findings from investigations conducted by the dedicated police unit, known as Peles, are also not shared for learning and implementation.
Suspension of contractors: The procedure for suspending contractors from government contracts following safety violations appears to lack the intended impact. According to the State Comptroller’s findings, of the 20 cases referred to the Accountant General, suspension proceedings were initiated in only four. Of those, three were subsequently put on hold for reassessment.
Recommendations for further action
What's next? The State Comptroller included in the report a series of recommendations for improving the handling of the phenomenon of work accidents in the construction industry in Israel. Among the key steps mentioned in the report are, for example:
· Completing gaps in standards in the Safety Administration (including allocating and staffing approximately 17 additional positions).
· Systematic monitoring of receipt of notifications regarding construction defects , recommended using computer systems.
· Improving processes for transferring overdue sanctions funds to the Fines Collection Center (including automating the process).
· Completing the steps required for the effective operation of the Investigations Unit, which will conduct criminal investigations to the required standard and will engage in criminal enforcement on an ongoing basis, including filing indictments in appropriate cases.
· Enforcing the obligation to install scaffolding in accordance with the standard , as well as working in collaboration with the Standards Institute of Israel to promote proper examination of additional scaffolding models.
· Consolidation of insights from the investigative unit (PLS) by the Safety Administration to draw lessons, including recommendations and their implementation.
· Expanding lessons learned processes to include non-fatal accidents and "near miss" cases.
· Reexamination to streamline the procedure for suspending contractors by the Ministry of Finance . Including preventing engagement with government ministries for accumulating safety violations.
· Examining the possibility of expanding the sanction of suspending contractors prone to disaster to also include contracting with additional entities such as local authorities, local authority corporations, government companies, and more.
What’s next? The State Comptroller’s report includes a series of recommendations for improving efforts to prevent workplace accidents in Israel’s construction industry. Key measures include:
Addressing staffing gaps at the Occupational Safety Administration, including allocating and filling approximately 17 additional positions.
Systematically tracking receipt of notices concerning construction site deficiencies, preferably through computerized systems.
Improving the referral of overdue financial penalties to the Center for the Collection of Fines, including automating the process.
Completing the steps required for the effective operation of the investigations unit, enabling it to conduct criminal investigations to the required standard and carry out ongoing criminal enforcement, including filing indictments where appropriate.
Enforcing the requirement to install scaffolding that complies with the applicable standard, and working with the Standards Institution of Israel to promote proper testing of additional scaffolding models.
Consolidating findings from the police investigation unit, Peles, through the Occupational Safety Administration to identify lessons, formulate recommendations, and implement them.
Extending the lessons learned process to include nonfatal accidents and near misses.
Reviewing and streamlining the Accountant General’s procedure for suspending contractors, including barring contractors from government contracts due to repeated safety violations.
Considering whether to extend the suspension of contractors with a history of safety violations to contracts with other bodies, such as local authorities, municipal corporations, government companies, and others.
In conclusion,
As an insurance agency that regularly assists its clients with the issue of work accidents, and as a business that has set itself the goal of covering this tragic issue on every platform, we see great importance in giving expression to the State Comptroller's report.
This is an extremely important report based on one of the most comprehensive and high-quality examinations conducted on the subject in recent years. We have no doubt that even if only some of the recommendations are implemented, and of course if all of them are addressed de facto, this will make a significant contribution to the national effort to reduce work accidents in the construction industry. This is about human lives and a beautiful one hour ago.
Documents
