[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

PROMOTING SAFE WORKPLACES THROUGH VOLUNTARY PROTECTION PROGRAMS

=======================================================================

HEARING

before the

SUBCOMMITTEE ON WORKFORCE PROTECTIONS

COMMITTEE ON EDUCATION
AND THE WORKFORCE

U.S. House of Representatives

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

HEARING HELD IN WASHINGTON, DC, JUNE 28, 2012

__________

Serial No. 112-64

__________

Printed for the use of the Committee on Education and the Workforce

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COMMITTEE ON EDUCATION AND THE WORKFORCE

JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin George Miller, California,
Howard P. ``Buck'' McKeon, Senior Democratic Member
California Dale E. Kildee, Michigan
Judy Biggert, Illinois Robert E. Andrews, New Jersey
Todd Russell Platts, Pennsylvania Robert C. ``Bobby'' Scott,
Joe Wilson, South Carolina Virginia
Virginia Foxx, North Carolina Lynn C. Woolsey, California
Bob Goodlatte, Virginia Ruben Hinojosa, Texas
Duncan Hunter, California Carolyn McCarthy, New York
David P. Roe, Tennessee John F. Tierney, Massachusetts
Glenn Thompson, Pennsylvania Dennis J. Kucinich, Ohio
Tim Walberg, Michigan Rush D. Holt, New Jersey
Scott DesJarlais, Tennessee Susan A. Davis, California
Richard L. Hanna, New York Raul M. Grijalva, Arizona
Todd Rokita, Indiana Timothy H. Bishop, New York
Larry Bucshon, Indiana David Loebsack, Iowa
Trey Gowdy, South Carolina Mazie K. Hirono, Hawaii
Lou Barletta, Pennsylvania Jason Altmire, Pennsylvania
Kristi L. Noem, South Dakota Marcia L. Fudge, Ohio
Martha Roby, Alabama
Joseph J. Heck, Nevada
Dennis A. Ross, Florida
Mike Kelly, Pennsylvania

Barrett Karr, Staff Director
Jody Calemine, Minority Staff Director
------

SUBCOMMITTEE ON WORKFORCE PROTECTIONS

TIM WALBERG, Michigan, Chairman

John Kline, Minnesota Lynn C. Woolsey, California,
Bob Goodlatte, Virginia Ranking Member
Todd Rokita, Indiana Dennis J. Kucinich, Ohio
Larry Bucshon, Indiana Timothy H. Bishop, New York
Trey Gowdy, South Carolina Mazie K. Hirono, Hawaii
Kristi L. Noem, South Dakota George Miller, California
Dennis A. Ross, Florida Marcia L. Fudge, Ohio
Mike Kelly, Pennsylvania

C O N T E N T S

----------
Page

Hearing held on June 28, 2012.................................... 1

Statement of Members:
Petri, Hon. Thomas E., a Representative in Congress from the
State of Wisconsin, prepared statement of.................. 46
Walberg, Hon. Tim, Chairman, Subcommittee on Workforce
Protections................................................ 1
Prepared statement of.................................... 3
Woolsey, Hon. Lynn, ranking member, Subcommittee on Workforce
Protections................................................ 4
Prepared statement of.................................... 5

Statement of Witnesses:
Barab, Jordan, Deputy Assistant Secretary for Occupational
Safety and Health, U.S. Department of Labor................ 7
Prepared statement of.................................... 8
Henson, Rob, process technician, LyondellBassell............. 15
Prepared statement of.................................... 16
Layne, R. Davis, executive director, Voluntary Protection
Programs Participants' Association, Inc.................... 27
Prepared statement of.................................... 29
Lee, Mike, general manager, Nucor Steel Decatur LLC; vice
president, Nucor Corp...................................... 24
Prepared statement of.................................... 26
Levine, David I., Haas School of Business, University of
California, Berkeley....................................... 17
Prepared statement of.................................... 19

Additional Submissions:
Mr. Barab, response to question submitted for the record..... 48
Mr. Layne, response to questions submitted for the record.... 50
Rokita, Hon. Todd, a Representative in Congress from the
State of Indiana, letter, dated June 6, 2012, from Mr.
Layne to OSHA.............................................. 39
Mr. Walberg:
Letter, June 28, 2012, from Associated Builders and
Contractors (ABC)...................................... 46
Questions submitted for the record:
To Mr. Barab......................................... 47
To Mr. Layne......................................... 49
Ms. Woolsey:
VPPPA press release...................................... 43
Table: ``OSHA Whistleblower Protection Program''......... 45

PROMOTING SAFE WORKPLACES THROUGH VOLUNTARY PROTECTION PROGRAMS

----------

Thursday, June 28, 2012

U.S. House of Representatives

Subcommittee on Workforce Protections

Committee on Education and the Workforce

Washington, DC

----------

The subcommittee met, pursuant to call, at 9:30 a.m., in
room 2175, Rayburn House Office Building, Hon. Tim Walberg
[chairman of the subcommittee] presiding.
Present: Representatives Walberg, Kline, Rokita, Bucshon,
Noem, and Woolsey.
Also Present: Representative Petri.
Staff Present: Katherine Bathgate, Deputy Press Secretary;
Adam Bennot, Press Assistant; Casey Buboltz, Coalitions and
Member Services Coordinator; Ed Gilroy, Director of Workplace
Policy; Benjamin Hoog, Legislative Assistant; Ryan Kearney,
Legislative Assistant; Donald McIntosh, Professional Staff
Member; Krisann Pearce, General Counsel; Molly McLaughlin
Salmi, Deputy Director of Workforce Policy; Linda Stevens,
Chief Clerk/Assistant to the General Counsel; Alissa
Strawcutter, Deputy Clerk; Loren Sweatt, Senior Policy Advisor;
Aaron Albright, Minority Communications Director for Labor;
Tylease Alli, Minority Clerk; Daniel Brown, Minority Policy
Associate; Jody Calemine, Minority Staff Director; Daniel
Hervig, Minority Fellow, Labor; Richard Miller, Minority Senior
Labor Policy Advisor; Megan O'Reilly, Minority General Counsel;
Michele Varnhagen, Minority Chief Policy Advisor/Labor Policy
Director; and Michael Zola, Minority Senior Counsel.
Chairman Walberg. Good morning. A quorum being present the
committee will come to order. We are going to try to talk fast
and listen fast today. I appreciate our subcommittee members
being here this morning. In light of that, we still have a very
important hearing to undertake.
I would like to welcome our guests and thank our witnesses
for being with us today. Deputy Assistant Secretary Barab, you
are certainly no stranger to the committee, and we welcome you
back. Today we will discuss what has become an important model
for workplace safety enforcement.
Approximately 1,500 inspectors from the Occupational Safety
and Health Administration work each day to enforce our Nation's
health and safety standards. In an economy as vast and dynamic
as ours, it is a difficult job. We would like to make it more
difficult by having an even more vast and growing economy.
The goods and services that are the driving force behind
the American economy come from countless workplaces across our
country. Fields such as hospitality, manufacturing, health care
and construction, to just name a few, can present a unique set
of health and safety concerns to workers. The challenges
crafting safety policy are as dynamic as the workplaces they
oversee.
Toward that end, we should encourage employers to adopt
innovative practices and provide strong protections for workers
while also promoting flexibility that can address the need of a
particular workplace. I believe that is why voluntary
protection programs have been so successful.
Established in 1982, Voluntary Protection Programs,
commonly referred to as VPP, have recognized employers and
workers who go above and beyond Federal standards in order to
improve health and safety in their workplaces. In exchange for
maintaining injury and illness rates below their respective
industries, participating work sites are exempt from OSHA's
routine inspections. A key feature of VPP is the cooperative
relationship it builds between employers, union leaders, and
workers and safety officials. Together these key stakeholders
design and implement the comprehensive safety and health
management strategy focused on identifying potential hazards
and the steps that will be taken to mitigate those hazards.
The comprehensive plan also outlines how the employers will
educate employees on the value of proactive safety in the
workplace.
The success of VPP speaks for itself with participating
work sites reporting 52 percent fewer days away, restricted or
transferred from work due to injury or illness. Popularity
among employers continues to grow with nearly 2,400 work sites
participating in the program today.
Even Federal agencies recognize inherent rewards of VPP and
are increasingly implementing programs in their workplaces. It
is important to note that the benefits of VPP extend beyond
those who currently participate in the program.
As we all know, bad actors will continue to cut corners,
put profit before safety, and place their workers in harm's
way. When they do, we need safety inspectors available to hold
them accountable and demand the corrective action. By working
with employers to promote a culture of safety, OSHA can direct
scarce resources toward the bad actors to improve the safety of
their workplaces.
Like any Federal program, VPP is not without its
weaknesses. In fact, in May 2009, the nonpartisan Government
Accountability Office released a report critical of OSHA's
management of the program. Since that time, the administration
has implemented a series of changes recommended by GAO to
enhance oversight and ensure greater uniformity in how these
programs are administered across the country. I hope we will
discuss these changes and whether they have led to a stronger
program.
Throughout the 112th Congress, the committee has worked to
advance a responsible approach to workplace safety, one that
promotes strong protections without undermining efforts to put
the American people back to work.
As you know, Mr. Barab, we ask tough questions and demand
straight answers. We will continue to do so and continue to
hold the administration accountable for the policies it
promotes. But I look forward to working with you on all these
important issues affecting America's workplaces in the months
ahead.
I will now recognize my distinguished colleague, Lynn
Woolsey, the senior Democratic member of the subcommittee for
opening remarks.
[The statement of Chairman Walberg follows:]

Prepared Statement of Hon. Tim Walberg, Chairman,
Subcommittee on Workforce Protections

Good morning, everyone. I would like to welcome our guests and
thank our witnesses for being with us today. Deputy Assistant Secretary
Barab, you are certainly no stranger to the committee and we welcome
you back.
Today we will discuss what has become an important model for
workplace safety enforcement. Approximately 1,500 inspectors from the
Occupational Safety and Health Administration (OSHA) work each day to
enforce our nation's health and safety standards. In an economy as vast
and dynamic as ours, it is a difficult job. The goods and services that
are the driving force behind the American economy come from countless
workplaces across the country. Fields such as hospitality,
manufacturing, health care, and construction--to name just a few--can
present a unique set of health and safety concerns to workers.
The challenge is crafting safety policies that are as dynamic as
the workplaces they oversee. Toward that end, we should encourage
employers to adopt innovative practices that provide strong protections
for workers, while also promoting flexibility that can address the need
of a particular workplace. I believe that is why Voluntary Protection
Programs have been so successful.
Established in 1982, Voluntary Protection Programs--commonly
referred to as VPP--have recognized employers and workers who go above
and beyond federal standards in order to improve health and safety in
their workplaces. In exchange for maintaining injury and illness rates
below their respective industries', participating worksites are exempt
from OSHA's routine inspections.
A key feature of VPP is the cooperative relationship it builds
between employers, union leaders, workers, and safety officials.
Together, these key stakeholders design and implement a comprehensive
safety and health management strategy focused on identifying potential
hazards and the steps that will be taken to mitigate those hazards. The
comprehensive plan also outlines how the employer will educate
employees on the value of proactive safety in the workplace.
The success of VPP speaks for itself, with participating worksites
reporting 52 percent fewer days away, restricted, or transferred from
work due to an injury or illness. Popularity among employers continues
to grow with nearly 2,400 worksites participating in a program today.
Even federal agencies recognize the inherent rewards of VPP and are
increasingly implementing programs in their workplaces.
It is important to note that the benefits of VPP extend beyond
those who currently participate in a program. As we all know, bad
actors will continue to cut corners, put profit before safety, and
place their workers in harm's way. When they do, we need safety
inspectors available to hold them accountable and demand corrective
action. By working with employers to promote a culture of safety, OSHA
can direct scarce resources toward the bad actors to improve the safety
of their workplaces.
Like any federal program, VPP is not without its weaknesses. In
fact, in May 2009, the nonpartisan Government Accountability Office
released a report critical of OSHA's management of the program. Since
that time, the administration has implemented a series of changes
recommended by GAO to enhance oversight and ensure greater uniformity
in how these programs are administered across the country. I hope we
will discuss these changes and whether they have led to a stronger
program.
Throughout the 112th Congress, the committee has worked to advance
a responsible approach to workplace safety, one that promotes strong
protections without undermining efforts to put the American people back
to work. As you know, Mr. Barab, we've asked tough questions and
demanded straight answers. We will continue to do so and continue to
hold the administration accountable for the policies it promotes. I
look forward to working with you on all these important issues
affecting America's workplaces in the months ahead.
I will now recognize my distinguished colleague Lynn Woolsey, the
senior Democratic member of the subcommittee, for her opening remarks.
______

Ms. Woolsey. Mr. Chairman, thank you for holding this
hearing to examine the Voluntary Protection Program, VPP, at
the Occupational Safety and Health Administration (OSHA).
OSHA, an agency our committee has jurisdiction over and has
been trying over the last years to bring OSHA into the 21st
century. One of the steps that some support is increasing the
size of VPP. But before we take any steps to increase the size
of VPP, we need to explore several issues about the program's
effectiveness and oversight funding.
In 2009, the GAO found that there were inadequate controls
to ensure that only genuinely safe work sites participated in
the VPP. When GAO reviewed files for 30 VPP sites that had
fatalities between 2003 and 2008, they found that OSHA had not
done an adequate follow-up.
The Center for Public Integrity found that two workers at
the Tropicana juice plant in Bradenton, Florida were severely
burned in a preventable explosion. OSHA inspected and found
instances where employees were told to throw safety out the
window. This was a VPP plant that allowed somebody to say that,
and they stayed in the program. That is, Mr. Chairman, very
troubling. There must be better OSHA oversight so that those
who do not belong in VPP are removed.
GAO also found that OSHA's evaluations of VPP have been
inadequate and that the only study done on its effectiveness
was flawed. I hope the majority would agree that a
scientifically credible study of VPP is necessary before moving
forward with legislation to expand this program.
The Government Accountability Office has cautioned that
growth in VPP could have unintended effects on resources needed
to protect workers at the millions of work sites outside of
VPP. Given flat budgets, VPP participants are going to have to
help cover OSHA's administrative costs through a fee if VPP is
going to grow significantly. The idea of a fee is not a new
one. It originally came from a Republican OSHA reform bill that
was reported out of the HELP committee in 1996.
Where employers fail to make employees' safety their first
priority, OSHA safety inspections are imperative. The following
example illustrates what happens when OSHA's limited resources
prevent it from inspecting a plant for two decades.
Last November, Carlos Centeno was burned over 80 percent of
his body at the Raani Corporation in Illinois after nearly
boiling cleaning solution scalded him. Carlos died 3 weeks
later from his burns. When OSHA investigated Carlos' death,
they found that serious injuries at the 150 employee factory
were abundant and some were never recorded. Yet these unsafe
working conditions were not caught because OSHA's last
inspection at the work site was 1993, almost 20 years.
The problem is that Federal OSHA only has enough resources
to inspect each work site once every 131 years--once every 131
years.
We know from peer reviewed studies conducted by one of our
witnesses here today that when inspections are conducted they
not only prevent workers from getting hurt, they also save
employers billions of dollars through reduced workers'
compensation costs. Given OSHA's limited resources, it counts
on the eyes and ears of workers at the job site to report
unsafe conditions that go unresolved and must be fixed.
However, if employers retaliate for reporting unsafe
conditions, workers need to know that OSHA will protect them
and their jobs at the same time in a timely manner. However,
Mr. Chairman, delays in investigating whistleblower complaints
are crippling this important protection. There is a backlog of
over 2,000 whistleblower cases that are pending for an average
of 359 days. That is why OSHA reallocated $3.2 billion in
efficiency savings to the whistleblower program from the
compliance assistance budget. Yet this has spurred overblown
rhetoric that OSHA has somehow put confrontation ahead of
cooperation or is gutting the VPP program.
Mr. Chairman, I look forward to hearing from our excellent
panel of witnesses. I thank you for being here today. Luckily,
it is not too hot and this will be a decent hearing. We won't
make it too hot for you either. So I yield back. Thank you Mr.
Chairman.
[The statement of Ms. Woolsey follows:]

Prepared Statement of Hon. Lynn C. Woolsey, Ranking Member,
Subcommittee on Workforce Protections

Mr. Chairman, thank you for holding this hearing to examine the
Voluntary Protection Program (VPP) at the Occupational Safety and
Health Administration.
Before we take any steps to increase the size of the VPP program,
we need to explore several issues about the program's effectiveness,
oversight and funding.
In 2009, the Government Accountability Office (GAO) found that
there were inadequate controls to ensure that only genuinely safer
worksites participated in the VPP. When GAO reviewed files for 30 VPP
sites that had fatalities between 2003 and 2008, they found that OSHA
had not done adequate follow-up.
The Center for Public Integrity found that two workers at the
Tropicana juice plant in Bradenton, Florida were severely burned in a
preventable explosion. OSHA inspected and found instances where
employees were told to ``throw safety out the window.'' yet the plant
was allowed to stay in vpp.
That is troubling. There must be better OSHA oversight so that
those who do not belong in vpp are removed.
GAO also found that OSHA's evaluations of VPP have been inadequate,
and that the only study done on its effectiveness was flawed. I hope
the Majority would agree that a scientifically credible study of VPP is
necessary before moving forward with legislation to expand this
program.
The Government Accountability Office has cautioned that growth in
VPP could have unintended effects on resources needed to protect
workers at the millions of worksites outside of VPP.
Given flat budgets, however, VPP participants are going to have to
help cover OSHA's administrative costs through a fee, if VPP is going
to grow significantly. The idea of a fee is not a new one. It
originally came from a Republican OSHA reform bill that was reported
out of the help committee in 1996.
Where employers fail to make employee safety their first priority,
OSHA's safety inspections are imperative.
The following example illustrates what happens when OSHA'ss limited
resources prevent it from inspecting a plant for two decades.
Last November, Carlos Centeno was burned over 80 percent of his
body at the Raani Corp. in Illinois, after a nearly boiling cleaning
solution scalded him. Carlos died three weeks later from his burns.
When OSHA investigated Carlos' death, they found that serious
injuries at the 150-employee factory were abundant. And some were never
recorded.
Yet, these unsafe working conditions were not caught because OSHA's
last inspection at this worksite was in 1993--almost 20 years ago. The
problem is that federal OSHA only has enough resources to inspect each
worksite once every 131 years.
We know from peer reviewed studies conducted by one of our
witnesses, that when inspections are conducted, they not only prevent
workers from getting hurt, they also save employers billions of dollars
through reduced workers' compensation costs.
Given OSHA's limited resources, it counts on the eyes and ears of
workers at the jobsite to report unsafe conditions that go unresolved.
However, if employers retaliate for reporting unsafe conditions,
workers need to know that OSHA will protect them and their jobs in a
timely manner.
However, delays in investigating whistleblower complaints are
crippling this important protection. There is a backlog of over 2000
whistleblower cases than have been pending for an average of 359 days.
That is why OSHA reallocated $3.2 million in efficiency savings to
the whistleblower program from the compliance assistance budget. Yet
this has spurred overblown rhetoric that OSHA has somehow put
confrontation ahead of cooperation or is gutting the VPP program.
I look forward to hearing from our excellent panel of witnesses. I
yield back.
______

Chairman Walberg. I thank the gentlelady.
Pursuant to Committee Rule VII(c) all Members are permitted
to submit written statements to be included in the permanent
hearing record, and without objection, the hearing record will
be remain open for 14 days to allow statements, questions for
the record and other extraneous material referenced during the
hearing to be submitted into the official record.
It is now my pleasure to introduce our distinguished panel
of witnesses. The first is Jordan Barab, Deputy Secretary,
Assistant Secretary of Labor for OSHA. Prior to his service at
the Department of Labor, Mr. Barab served as a Senior Labor
Policy Adviser on this committee. Welcome back. Under Chairman
Miller. Mr. Barab holds an undergraduate from Claremont McKenna
College and a Master's Degree from Johns Hopkins.
Robert Henson is a Process Technician with LyondellBasell
in Channelview, Texas. Mr. Henson has been with the company for
26 years. Mr. Henson received his Associate of Arts Degree from
San Jacinto Junior College in 1980.
David Levine is the Trefethen Professor of Business
Administration with the Haas School of Business at the
University of California, Berkeley. Dr. Levine was an
undergraduate at Berkeley and received his Ph.D. in economics
from Harvard University. Welcome.
I will now turn to Mr. Rokita to introduce our fourth
witness.
Mr. Rokita. Thank you for the privilege, Mr. Chairman. I am
pleased to introduce Mike Lee, the Vice President and General
Manager for Nucor Steel in Decatur, Alabama. I am pleased to
note, also, Mr. Chairman, that Nucor has a plant in my district
in Crawfordsville, Indiana. I have been there many times and
can attest that Nucor employees are the best of Hoosiers and
indeed the best of Americans. Nucor's corporate safety culture
is exactly demonstrated through their commitment to programs
such as VPP, which I have witnessed.
Mr. Lee holds an engineering degree from Johns Hopkins and
has held a variety of positions with Nucor Steel, and I am
happy to welcome him here today.
Chairman Walberg. I thank the gentleman.
And our final witness, Davis Layne, is the Executive
Director of the Voluntary Protection Programs Participants'
Association, VPPPA. Prior to his directorship, Mr. Layne served
in numerous positions at OSHA, including Deputy Assistant
Secretary.
Before I recognize each of you to provide your testimony,
let me briefly explain our lighting system, which is not
totally unfamiliar to a number of you. You will have 5 minutes
to present your testimony. When you begin, the light in front
of you will turn green. When 1 minute is left the light will
turn yellow. When your time is expired, the light will turn
red, at which point I ask you to wrap up your remarks as best
as you are able. Your full testimony is included in our record.
After you have testified, members will each have 5 minutes
to ask questions of the panel, and I will hold myself and our
panel to that today, especially in light of decisions being
made and interest in those decisions.
With that, let me ask Mr. Barab to begin the witness
testimony.

STATEMENT OF JORDAN BARAB, DEPUTY ASSISTANT SECRETARY OF LABOR,
OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION, U.S. DEPARTMENT
OF LABOR

Mr. Barab. Thank you, Mr. Chairman. Chairman Walberg,
Ranking Member Woolsey, and members of the subcommittee, thank
you for this opportunity to discuss OSHA's voluntary protection
program, or VPP.
I also would like to take a moment to wish Ms. Woolsey the
best on her retirement but I also want to express how sorry we
will be to see you go. You have been a tireless advocate for
worker safety and worker rights in general and your voice will
be sorely missed.
OSHA is very proud of VPP, and we believe it represents a
necessary and effective way to recognize and reward companies
that have implemented safety and health management systems,
maintained injury and illness rates below the national average
for their industries, and excelled in worker protection.
VPP companies are characterized by successful injury and
illness prevention programs and labor and management
cooperation and clearly demonstrate that it is possible to
operate a company that is both profitable and serves as a model
for worker protection.
These employers often utilize best practices and hazard
prevention controls that are more rigorous than those required
by OSHA standards.
As of June 21, 2012 there are 2,374 total active VPP sites
protecting more than 911,000 workers. VPP participants can be
found across American industry from manufacturing to chemicals,
and construction to motor freight transportation.
Participants often speak of a cultural transformation that
can occur at a company during the development of a
comprehensive safety and health program as part of the VPP
application process. Fewer injuries and illnesses translate
into greater profits for employers when workers' compensation
premiums and other costs are reduced.
There are many success stories within VPP, among them is
the Nucor Corporation, the largest manufacturer of steel
products in North America which began participating in 2007.
When one division in Decatur, Alabama first applied, their
first goal was simply to be recognized as a VPP participant. As
described by management, however, what actually happened at the
plant was an evolution of safety and significant decrease in
injuries and illnesses.
Despite VPP's success, however, OSHA must struggle to meet
competing priorities and balance our resources. Make no
mistake, OSHA is committed to VPP as well as our other
cooperative programs. But like every other Federal agency, we
need to make difficult decisions about how to allocate our
limited resources. Our challenge is to maintain an active,
quality VPP while also providing assistance to small
businesses, help for vulnerable workers, support to enable
workers to exercise their rights under the law without fear of
retaliation, and an active enforcement program that focuses on
the worst offenders.
In addition to resource considerations, the program's
slower growth in recent years is partly attributable to OSHA's
concern with maintaining the integrity of the program. When the
integrity of this program is compromised, it doesn't matter how
many participants the program has or how fast it is growing. We
do not want a few bad apples to spoil the bunch.
A 2004 Government Accountability Office program report
warned that VPP was growing faster than OSHA's resources might
be able to sustain. In 2009, GAO found that OSHA did not have
sufficient internal controls to ensure the quality of VPP work
sites and that its oversight of VPP sites was limited. There
have also been numerous fatalities at VPP sites since 2000, and
in some no action was taken against the participating
companies, even where the fatalities were linked to serious or
willful violations.
The number of VPP participants has doubled since 2003, but
the number of program participants grew so rapidly that the
number of reapprovals required has put a serious strain on the
agency's resources.
We are now focused on conducting those reapprovals,
eliminating the backlog and addressing the other issues that
have been raised in order to ensure that every participant in
the program deserves to stay in the program.
Finally, in order to ensure that VPP participants remain
leaders in safety and health after discussion with VPPPA, OSHA
issued a new policy letter 1 year ago prohibiting any incentive
programs that have the potential to discourage reporting of
injuries and illnesses. After being identified in the
reapproval process, almost all the VPP participants who have
these policies have agreed to eliminate them.
OSHA will continue to promote safe workplaces not only for
enforcement for those employers who continue to fail to
prioritize worker safety and health but also through active
support and assistance for small employers and vulnerable
workers while continuing to recognize and reward employers who
go beyond our requirements to protect their employees.
VPP has demonstrated its value over the decade since it was
established. VPP will continue to have my full support and that
of Assistant Secretary Michaels.
Thank you and I look forward to any questions you may have.
[The statement of Mr. Barab follows:]

Prepared Statement of Jordan Barab, Deputy Assistant Secretary for
Occupational Safety and Health, U.S. Department of Labor

Chairman Walberg, Ranking Member Woolsey, and Members of the
Subcommittee: Thank you for this opportunity to discuss the
Occupational Safety and Health Administration's (OSHA) Voluntary
Protection Program (VPP). The agency is very proud of VPP and we
believe that the program represents a necessary and effective way to
recognize and reward companies that make the safety and health of their
employees their highest priority.
Over the past three and a half years, Dr. Michaels and I have met
with the Voluntary Protection Program Participants' Association (VPPPA)
board and members on many occasions and visited VPP plants across the
country. We've been extremely impressed with the health and safety
programs at those sites. We have witnessed firsthand the participating
companies' dedication to workplace safety, as evidenced by the
utilization of best practices and implementation of safety and health
management systems that are often more rigorous than that required by
OSHA standards, as well as an obvious pride in their health and safety
achievements. VPP companies are characterized by successful injury and
illness prevention programs and labor-management cooperation, which
result in excellent injury and illness rates. These employers clearly
demonstrate that it is possible to operate a company that is both
profitable and serves as a model for businesses and industries in all
sectors of the American economy.
Companies that demonstrate such a strong and unwavering commitment
to workplace safety and health deserve recognition, and, through VPP,
OSHA is able to provide this important acknowledgment of their efforts.
To that end, OSHA publicizes the success of VPP participants through
stories on the agency's web site, press releases, and recognition in
the speeches of OSHA officials.
History
OSHA's Voluntary Protection Program has a long and honorable
history. In creating OSHA, Congress wisely gave the agency substantial
flexibility to use a mix of enforcement, standardsetting, compliance
assistance, and voluntary programs to achieve the goal of protecting
our nation's workforce. The VPP, which launched in 1982, is one of the
components of this programmatic mix.
VPP recognizes employers and workers, in both private industry and
the Federal Government, who have implemented safety and health
management systems and maintained injury and illness rates below the
national average for their industries. Through VPP, OSHA works
cooperatively with management and labor to prevent occupational
injuries, illnesses and deaths. VPP participant worksites maintain
comprehensive injury and illness prevention programs that share a
number of important elements, including: (1) management commitment and
worker involvement; (2) worksite analysis; (3) hazard prevention and
control; and (4) training. In our experience, employers who qualify for
VPP generally view OSHA standards as establishing a minimum level of
safety and health performance; they often go beyond OSHA requirements
in protecting their workforce, and involve their employees in all
aspects of the health and safety process.
How VPP Works
Employers seeking to participate in VPP must submit a written
application and undergo a rigorous on-site evaluation by a team of
safety and health professionals. In addition, union support is required
for applicants represented by a bargaining unit. There is no single
correct way to meet the VPP application requirement. VPP Managers are
stationed in each of OSHA's ten Regional offices to offer advice and
guidance on completing the application process. Successful applicants
will demonstrate health and safety management systems that work for
their specific work activities and hazards. In completing the
application process, OSHA encourages employers to submit existing
documentation to the extent possible, rather than create a large
quantity of new materials.
Once an application for VPP has been reviewed and accepted by the
Region, an on-site evaluation is generally conducted within six months.
If there are no items that need improvement, the applicant typically
receives a formal approval letter three to eight months after the on-
site evaluation. Initial approval is valid 30-42 months for a Star
site, 18-24 months for a Merit site, and 12-24 months for a
Demonstration site. Resource limitations may impact the approval
process, including to the review of applications, scheduling onsite
evaluations, finalizing onsite evaluation reports, and approving sites.
OSHA has been able to meet the goals established in its Operating Plan
and Budget for completing new VPP approvals, but recognizes that the
length of time for approving new sites is of concern to applicants, and
we are working to address this issue. The agency also is working to
address the backlog of reapproval evaluations. Because of the VPP's
rapid growth since 2003, reapproval evaluations for a considerable
number of VPP participants were due during the last few years. This
demand led to a backlog in conducting reapproval visits. OSHA has
focused on reducing the reapproval backlog and anticipates eliminating
it by the end of 2012.
Generally, an on-site evaluation takes 3 to 5 days and utilizes 2
to 6 staff, including Special Government Employees (SGEs), who are
specially-trained private-sector and government employees from existing
VPP members and that supplement OSHA's resources to help bring in new
participants and reapprove current participants. On-site evaluations at
shipyards, refineries, or other sites with activities that fall under
the OSHA Process Safety Management standard can take considerably
longer--up to 10 work days. On-site visits are conducted as part of
both the VPP approval and reapproval processes.
Participation in VPP does not diminish an employer's
responsibilities or the rights of employees under the OSH Act. VPP
participants are exempt from OSHA programmed inspections while they
maintain their VPP status. These worksites still will be inspected,
however, when three hospitalizations or a fatality occurs, or when
employees file a formal complaint about workplace hazards.
If an onsite evaluation reveals a hazard that endangers the health
and safety of employees, the onsite evaluation team must add the hazard
to a written list of uncontrolled identified hazards. If the VPP
participant cannot correct the identified hazard before the conclusion
of the onsite evaluation, then the hazard will be assigned as a 90-day
item. If a VPP participant refuses to correct the noted hazard, the
worksite in violation is referred to OSHA enforcement for an inspection
and appropriate remedial measures, including sanctions, fines, and
termination from the program.
OSHA currently approves qualified employer VPP sites for
participation in one of three programs. The first, Star, provides
recognition for companies that demonstrate exemplary achievement in the
prevention and control of occupational safety and health hazards and
the development, implementation and continuous improvement of their
safety and health management system. Worksites in the Star program have
achieved injury/illness rates at or below the national average for
their industries. These sites are self-sufficient in their ability to
control hazards. Star participants are re-evaluated every 3 to 5 years,
but their incident rates are reported to OSHA and reviewed annually.
Merit recognizes companies that have developed and implemented good
safety and health management systems, but need to take additional steps
to achieve Star quality.
Demonstration recognizes companies that operate effective safety
and health management systems that differ from current VPP
requirements. Demonstration status provides the opportunity for
employers to show the effectiveness of alternative methods of achieving
safety and health management excellence. For example, employers with
Demonstration status can test the potential of a new approach to hazard
reduction within VPP. Demonstration status also recognizes the
potential for such purposes as exploring the application of VPP in an
industry where it isn't commonly utilized.
As of May 31, 2012, there were 2,374 total active VPP sites
(Federal and State) protecting more than 911,000 workers. This figure
has more than doubled since 2003. VPP participants can be found across
the entire spectrum of American industry--from manufacturing to
chemicals, and construction to motor freight transportation, including
Federal worksites such as Hanscom Air Force Base in Bedford,
Massachusetts.
VPP participants are models for effective employee protection in
their respective industries. The most obvious evidence of the program's
success is the impressive reduction in occupational injury and illness
rates, as well as reduced workers' compensation costs and decreased
employee turnover. Participants speak often of the ``cultural
transformation'' that often occurs during the VPP application process.
Data shows that site-based non-construction participants' Total
Case Incident Rates (TCIR i.e., the total number of nonfatal recordable
injuries and illnesses that occur per 100 full-time employees) of VPP
members are 45 percent below the Bureau of Labor Statistics (BLS)
rates. The Days Away from Work, Restricted Work Activity, or Job
Transfer (DART, i.e., the rate of injuries and illnesses that result in
workers having days away from work, restricted work activity, and/or a
job transfer) rates are 56 percent below the BLS rates for their
respective industries. For site-based construction and mobile workforce
participants, TCIR are 60 percent below the BLS rates, and the DART
rates are 56 percent below the BLS rates for their respective
industries. Fewer injuries and illnesses mean greater profits for
employers as workers' compensation premiums and other costs, such as
downtime, are reduced. Industries gain from VPP because VPP
participants set an example for other companies. For its part, OSHA
also gains a corps of ambassadors who are enthusiastic about the
message of safety and health management and who are eager to share
their success stories with others.
In light of the success of the Federal VPP, OSHA has encouraged
State plans to establish parallel programs. I am pleased to report that
all State plans have done so. Although State VPPs are similar to the
federal program, they may have different participation categories,
processes and criteria. In particular, we note that some States include
programs that closely correspond to OSHA's Star program.
OSHA is also increasing the use of its valuable Special Government
Employee (SGE) Program in VPP evaluations. SGEs are employees of VPP
firms that assist OSHA in evaluating the worksites of other potential
VPP applicants. Prospective SGEs must be approved by OSHA, funded by
their companies, and complete a three-day OSHA training course before
these qualified volunteers are sworn is as SGEs. VPP worksites and
their companies generously support their employees' SGE participation.
As of May 31, 2012, there were 1,277 SGEs. In FY 2011, 63 percent of
VPP Evaluation Teams used SGEs. The SGE Program encompasses the spirit
of VPP's cooperation among industry, labor, and the federal government.
This cooperation, in turn, embodies the idea of continuous improvement,
which allows SGEs to bring a unique perspective to the team effort and
take back to their individual worksites ideas and best practices to
further improve worker protections.
To recognize the significant value SGEs bring to VPP and OSHA, each
year OSHA presents its National SGE of the Year Award to an SGE who
epitomizes and exhibits exceptional support, time, effort, and action
in furtherance of VPP. The awardee is actively involved in volunteer
activities that benefit the VPP and its stakeholders, and demonstrates
outstanding commitment to the VPP ideal of cooperative partnership. The
2011 SGE of the Year Award was presented to Gilbert Aceves, a certified
welder, certified electrician, and Production Lead Person at Morton
Salt Inc., in Long Beach, California.
VPP Success Stories
The VPP has produced many success stories. Among them is the Nucor
Corporation, the largest manufacturer of steel products in North
America, which began participating in the program in 2007. When one
division in Decatur, Alabama, first applied, the goal was simply to be
recognized as a VPP participant. As described by management, however,
what actually happened at the plant was an evolution of safety. VPP
sparked a process of improvement that turned into the ultimate team-
building exercise. Within several years, the TCIR and DART rate were 83
percent and 80 percent, respectively, below the national average for
the steel industry. Today, the site's TCIR is 86 percent below the
industry average and the DART is 89 percent below.
Hypertherm, a precision turned product manufacturing company,
located in Hanover, New Hampshire, is similarly representative of VPP
success, The company, recognized by OSHA Assistant Secretary David
Michaels in April 2011, is characterized by: a culture of safety with
management leadership and worker involvement, including a company CEO
who attends the worksite's safety council meetings; a priority given to
fixing hazards before someone gets hurt; adoption of VPP's model safety
and health management system; and a safety and health team that
includes a professional ergonomist, process engineer, wellness staff,
and safety coordinator. In significant part because of its safety
culture, Hypertherm was voted ``Best Place to Work'' by Business New
Hampshire magazine.
Difficult Decisions
Despite its enormous success, there are serious issues with VPP
that we are striving to address. First, in these challenging economic
times, OSHA must struggle to meet competing priorities and balance our
resources. Make no mistake: the Department of Labor is committed to
VPP, as well as OSHA's other cooperative programs, but like every other
Federal agency, we need to make some very hard decisions about how to
allocate our limited resources where we will get the most worker
protection ``bang for our buck.'' Our challenge, therefore, is to
maintain an active, quality VPP while also providing assistance to
small businesses, help for vulnerable workers, support to enable
workers to exercise their rights under the law, and an active
enforcement program that focuses on the worst offenders--the companies
that don't get the message, continue to ignore the law, and needlessly
put workers' lives in jeopardy.
Regarding the importance and effectiveness of OSHA's enforcement
programs, recent studies confirm the effectiveness of enforcement in
ensuring the safety and health of workers. We were very heartened by
research from Michael Toffel and David Levine, business school
economists at Harvard University and the University of California,
respectively, which demonstrates OSHA workplace inspections not only
improve safety, but also save billions of dollars for employers through
reduced workers' compensation costs. The study, entitled ``Randomized
Government Safety Inspections Reduce Worker Injuries with No Detectable
Job Loss,'' \1\ reports that companies subject to random inspections by
CAL/OSHA showed a 9.4 percent decrease in injury rates compared with
uninspected firms in the four years following the inspection. With no
evidence of a negative impact on jobs, employment, or profitability of
the inspected firms, the decrease in injuries led to a 26 percent
reduction in workers' compensation costs--translating to an average
savings of $350,000 per company. Savings were observed among both small
and large employers, and, if extrapolated to the full, nation-wide
extent of OSHA inspection activities, would amount to savings of
roughly $6 billion nationwide. These findings lend support to our
belief that OSHA regulatory enforcement save lives while reducing
workers' compensation costs for American businesses.
---------------------------------------------------------------------------
\1\ Levine, D, Toffel, M., Johnson, M. Randomized Government Safety
Inspections Reduce Worker Injuries with No Detectable Job Loss, Science
18 May 2012: Vol. 336 no. 6083 pp. 907-911
---------------------------------------------------------------------------
Other studies examining the effectiveness of OSHA's enforcement
scheme yield similarly encouraging results. In a study of Pennsylvania
manufacturing from 1998-2005, John Mendeloff and a group of researchers
associated with the RAND Corporation and the University of
Pittsburgh,\2\ found that OSHA inspections which resulted in penalties
reduced injuries by an average of 19-24 percent annually in the two
years following the inspection. And researchers affiliated with the
Safety and Health Assessment and Research for Prevention Program of the
Washington State Department of Labor and Industries found that
Washington State OSHA inspections made a significant contribution to
reducing workers' compensation rates and costs in the year following an
inspection.\3\
---------------------------------------------------------------------------
\2\ Haviland, A. M., Burns, R. M., Gray, W. B., Ruder, T. and
Mendeloff, J. (2012), A new estimate of the impact of OSHA inspections
on manufacturing injury rates, 1998--2005. Am. J. Ind. Med. doi:
10.1002/ajim.22062
\3\ Foley, M., Fan, Z. J., Rauser, E. and Silverstein, B. (2012),
The impact of regulatory enforcement and consultation visits on
workers' compensation claims incidence rates and costs, 1999--2008. Am.
J. Ind. Med. doi: 10.1002/ajim.22084
---------------------------------------------------------------------------
On-site Consultation and SHARP
In order to support small businesses that may not be able to afford
in-house safety and health expertise or hire an outside consultant,
OSHA invests significant resources in the state-based On-site
Consultation Programs, which offer free and confidential advice to
small and medium-sized businesses who are looking to create or improve
their injury and illness programs. In FY 2010, for example, the On-site
Consultation program conducted over 30,000 visits to worksites covering
over 1.5 million workers nationwide, with priority given to high-hazard
worksites. Consultants from state agencies or universities work with
employers to identify workplace hazards, provide advice on compliance
with OSHA standards, and assist in establishing injury and illness
prevention programs.
The On-site Consultation Program's Safety and Health Recognition
and Achievement Program (SHARP) is another particularly effective use
of the agency's resources. SHARP recognizes small employers who operate
exemplary injury and illness prevention programs and serve as a model
for workplace safety and health. Upon receiving SHARP recognition, OSHA
exempts a worksite from programmed inspections during the period that
the SHARP certification is valid. You are probably aware that the On-
site Consultation program, with its SHARP exemptions from programmed
inspections for employers who do the right thing, received a
significant increase in funding from Congress in FY 2012. The President
has proposed to maintain that increase in his FY 2013 budget request.
Whistleblower Program
We have also found it necessary to increase resources for our
Whistleblower program. When the OSH Act was passed, Congress realized
that OSHA inspectors would never be able to visit more than a small
fraction of the nation's workplaces in any given year. Thus, the OSH
Act relies heavily on workers to help identify hazards at their
workplaces and to work with their employers to control those hazards.
But Congress also understood that workers are not likely to
participate in safety and health activities, or report on hazardous
conditions, if they fear that they will lose their jobs or otherwise be
retaliated against as a result of their activities. For this reason,
section 11(c) protects employees from discrimination and retaliation
when they report safety and health hazards or exercise other rights
under the OSH Act--one of the first safety and health laws to contain a
provision for protecting whistleblowers.
Since the OSH Act was enacted in 1970, Congress has charged OSHA
with enforcement responsibility for 20 additional whistleblower anti-
retaliation statutes. Together, these laws protect employees who report
violations of trucking, airline, nuclear power, pipeline,
environmental, rail, mass transit, maritime safety, consumer product
safety, and securities laws that are of fundamental importance in
protecting the health, safety and well-being of all Americans.
Despite the increase in OSHA's statutory responsibilities, the
staff charged with enforcing these laws did not grow significantly
until FY 2010, when 25 whistleblower investigators were added to OSHA's
ranks. Since 2010, however, four new whistleblower laws have been added
to OSHA's enforcement program. It is vitally important that American
workers feel safe to report threats to their own safety and to public
safety, and, if their whistleblowing activities adversely affect their
employment, they should not have to wait years for their cases to be
heard.
Integrity of VPP
We understand there are concerns that VPP is not growing as quickly
as it has in the recent past. As I outlined above, this is, in part a
result of resource limitations. However, it is also attributable to
OSHA's concern with maintaining the integrity of the program. VPP is
recognized and respected as a quality program, one that recognizes the
best of the best--companies that excel in safety and health and show
that it is possible for businesses to be both profitable and safe.
Nevertheless, if the integrity of this program is compromised, it
doesn't matter how many participants the program has or how fast it is
growing. Over the past years, unfortunately, the program has faced very
difficult challenges in this area. During the middle of the last
decade, VPP grew so rapidly--more than doubling since 2003--that the
high number of reapprovals required as a result of that growth has put
a serious resource strain on the agency's resources. As previously
mentioned, we are now forced to devote most of our VPP resources toward
conducting those reapprovals to ensure that everyone in the program
deserves to stay in the program.
Moreover, when injury and illnesses numbers start rising; when
significant incidents occur; when serious violations are identified;
or, when VPP policies are violated, OSHA must be ready to take swift
action. As the Center for Public Integrity pointed out in 2011, there
had been numerous fatalities at VPP sites since 2000, and no action was
taken against the participating companies, even in some cases where the
fatalities were linked to serious or willful violations. They also
found that some companies were retained in the VPP, even when their
injury and illness rates were worse than the averages for their
respective industries.
The Government Accountability Office (GAO) identified these VPP
integrity concerns in two reports, issued in 2004 and 2009. In its
first report, GAO warned that the VPP was growing faster than OSHA's
resources might be able to sustain. And in 2009, GAO found that OSHA
did not have sufficient internal controls to ensure the quality of VPP
worksites, and that its oversight of VPP sites was limited. For
example, GAO reported that OSHA had not been following through with
appropriate action when fatalities or serious injuries occurred at VPP
sites.
GAO made three key recommendations in its 2009 report:
1. Develop a documentation policy for information on actions taken
by OSHA's regions in response to fatalities and serious injuries at VPP
sites.
2. Establish internal controls that ensure consistent compliance by
the Agency's Regions with VPP policies.
3. Develop goals and performance measures for the VPP.
In response to these recommendations, OSHA issued five Policy
Memoranda designed to strengthen the management and internal control of
VPP. In August 2009, for example, we specified the actions National and
Regional offices must take to improve administration of VPP, including
verification of the quality of VPP self-evaluations that are required
each year, as well as the quality of regional review of VPP sites.
In November 2009, we clarified the conduct expected of VPP
evaluators. Dr. Michaels then issued a second memorandum in November
2009 clarifying the process through which OSHA's Regional offices must
notify VPP participants and their union representatives of site
reapprovals. This memorandum also specified the procedures for
reconciling injury/illness data on the OSHA log required of employers
with data submitted to OSHA during annual self-evaluations. And in
February 2011, we clarified the policy and procedures under which VPP
participants are to submit annual data.
To ensure compliance with these new policies, OSHA's National
office reviews all fatality information submitted by the Regions and
maintains up-to-date information on the status of each incident in its
VPP fatality database.
OSHA also initiated annual audits of Regional offices' VPP
participant files to ensure that participant files properly document
the occurrence of a fatality or serious injury. The participant file
audit requires each Region to submit copies of specified VPP files to
the National office for review. Upon completion of the audit, a
memorandum of findings documents the results.
In addition, we updated the Management Accountability Program (MAP)
on September 15, 2010. The MAP contains an annual audit, performed by
each Region, to ensure that field offices follow national program
policies and procedures, including those established for VPP. In
particular, the updated MAP incorporates VPP program enhancements, such
as required Regional actions and documentation in response to a
fatality or serious injury at a VPP site.
Safety Incentive Programs
In April 2011, due to our concern about workplace policies and
practices that can discourage workers from reporting injuries, and
following discussions with VPPPA leadership, OSHA clarified the policy
and procedures governing the review of safety and health incentive
programs run by VPP participants and applicants. After additional
discussion with the VPPPA, OSHA further refined that policy in June of
2011. The new instruction states that incentive programs at VPP
worksites should promote safety awareness and worker participation and
should not contain features that have the potential to discourage
reporting.
Some incentive programs--especially those based on injury and
illness rates--discourage workers from reporting injuries. We've seen
companies, for example, offer a pizza party or enter workers into a
raffle if they meet a goal of not incurring reportable injuries over a
specified period of time. Programs like these, while possibly well
intentioned, ultimately discourage workers from reporting injuries
because they want to receive the reward or do not want to be perceived
as having ruined it for everyone. Unreported injuries that are not
investigated cannot be used to help prevent future injuries. This is
not what we want and ultimately, I do not think it is what VPP
participants want, either.
But we certainly are not opposed to all incentive programs. On the
contrary, a positive incentive program that encourages or rewards
workers for serving on safety and health committees, completing safety
and health training, or reporting injuries, illnesses, near-misses, or
hazards can encourage worker involvement in a safety and health
management system. An incentive program that encourages positive
employee involvement is a valuable component of a VPP-quality safety
and health management system.
Since the policy was implemented a year ago, most companies with
impermissible incentive programs have voluntarily withdrawn them. In a
very few cases, however, we have been forced to terminate their
participation. This is unfortunate, but we believe that VPP companies
must lead the way, promoting safety programs that do not discourage
reporting.
Ensuring that workers can report injuries or illnesses without fear
of negative consequences is crucial to protecting their safety and
health. If workers don't feel free to report injuries or illnesses, an
entire workforce is put at risk: employers don't learn about and
correct dangerous conditions that have resulted in injuries, and
injured workers may not receive proper medical attention or workers'
compensation benefits to which they are entitled.
An April 2012 GAO report confirmed these problems with rate-based
incentive programs. The GAO recommended that OSHA:

``Implement criteria on safety incentive programs and other
workplace safety policies across all of its cooperative
programs such as VPP and SHARP. The criteria should be
consistent with the most recent VPP guidance memorandum that
prohibits employers with safety incentive programs that focus
on injury and illness rates from participating in the
program.''

As part of OSHA's comprehensive response to GAO, as well as the
ongoing VPP improvement process, we are refining internal controls and
doing a better job measuring program effectiveness. A VPP Workgroup,
composed of personnel from both OSHA Headquarters and the Regions, has
reviewed several issues, including consistency in VPP administration,
response to fatalities on VPP sites, speeding up the approval process,
use of limited resources, and the cost of administering the program.
A draft report and recommendations based on an internal management
review of the program was submitted to the Assistant Secretary in
November 2011. OSHA has already begun work on key changes to strengthen
the program's effectiveness and integrity, many of which were
recommended the review. In particular, the Workgroup report focused on
ensuring the program's continued value and relevance as a model of
excellence; identifying changes in policy, performance requirements,
and procedures that will improve the program and maintain its
integrity; operating the program consistently throughout the 10 OSHA
Regions; and finding ways to address resource issues without
compromising VPP's rigorous standards and requirements.
Conclusion
Mr. Chairman, VPP is an integral part of the toolbox which the
Congress has provided to OSHA to accomplish our mission. We must have
strong enforcement for those employers who simply will not adequately
protect their workers' safety and health, as well as provide needed
assistance to small employers and vulnerable workers. But we must also
continue to recognize and reward employers who go beyond OSHA's
requirements in protecting their employees. Since its inception, VPP
has demonstrated its value in advancing this primary goal. We are
extremely proud of this program and are working every day to strengthen
it. VPP will continue to have the Department of Labor's full support.
______

Chairman Walberg. Thank you.
Mr. Henson.

STATEMENT OF ROB HENSON, PROCESS TECHNICIAN,
LYONDELLBASSELL

Mr. Henson. Thank you, Chairman Walberg and Ranking Member
Woolsey. Thank you for allowing me to be here this morning on
behalf of the Voluntary Protection Programs Participants'
Association and to testify before you today and for all your
efforts on behalf of working Americans everywhere.
I would also like to express my sincere gratitude that you
have taken the time to highlight the tremendous impact that the
Voluntary Protection Programs have had for approximately 1
million workers like myself across the United States. And it is
through these combined efforts of Occupational Safety and
Health Administration and management and labor that this is
possible.
As was stated earlier, I work as a process technician for
LyondellBasell in Channelview, Texas. It is a very large
chemical processing facility employing nearly 2,000 people. We
manufacture a wide variety of chemicals which are used in
countless products across the globe. We have been a participant
in the OSHA VPP program for nearly 20 years.
Management leadership and employee involvement, work site
analysis, hazard prevention and control and safety and health
programs, which are the elements of VPP, have been a major
reason why the Channelview facility is one of the safest places
to work. In fact, our year to date total recordable injury
rate, or our TRIR, is about a 0.30 at this time. This is
approximately eight times lower than the chemical industry
average of 2.4 based upon Bureau of Labor and Statistics latest
information.
VPP is all about developing a culture of safety and health
excellence, actively safeguarding personal lives and
livelihoods and also those of your coworkers, family and
community. Cooperation extends beyond the work site to include
industry and community outreach. The culture and mindset of our
employees is that everyone that enters our facility will go
home at the end of the day as safe and sound as when they
arrived. Safety is a truly number one priority at my facility.
Anyone in our plant has the right and the obligation to stop
and question anything that they feel may lead to an injury or
unsafe condition. This not only applies to LyondellBassell
employees, but to our contractors as well.
Participation in the VPP program has allowed our safety and
health programs to be driven by the employees. Everyone has the
opportunity and expectation to participate in a variety of
safety programs. Management has provided us with all the tools
and training materials we need not only to perform our jobs
safely, but to also recognize potential hazards and to take
actions to eliminate the problem before an accident occurs.
As an operator in the field, I have the authority to
initiate and execute the shutdown of the unit, and this is
without any fear of reprisal from management, if I feel that
the safety and health of myself or my coworkers may be in
jeopardy. This is the culture that exists at a VPP site.
There are a lot of values of the program and not enough
time today to discuss all of them. But I would like to share
one success story today about a major U.S. company as told to
me by the safety and health manager of the New England branch.
It had been determined that this branch was to be shut down and
relocated overseas where production costs were cheaper. As of
today, this operation is still open for business in the same
location, and the reason is due to a reduction in worker
compensation costs brought on by participation in the VPP
program. It became cheaper to produce their products in the
United States than to send it overseas. The Voluntary
Protection Program not only saves lives but saves jobs as well.
The spirit of cooperation between OSHA, management and
labor, which is the foundation of the VPP program, has been an
extraordinary success. Those who choose to participate are
leaders in safety and health and are proactive in protecting
workers.
Last week, I had the opportunity to attend the Region 4 VPP
conference in Chattanooga, Tennessee. And at that conference
there was an OSHA official who stood before the group, and I
would like to tell you some of the comments that he made. He
stated that if my children had the choice of working at a VPP
site or a site where OSHA had made compliance visits, he would,
without a doubt, recommend the VPP side for his children.
I would like to thank you once again for allowing me to be
here today and hope for your continued support in this very
important program. Thank you.
[The statement of Mr. Henson follows:]

Prepared Statement of Rob Henson, Process Technician, LyondellBassell

Thank you Chairman Walberg, Ranking Member Woolsey and members of
the subcommittee for inviting me on behalf of the Voluntary Protection
Participants Association (VPPPA) to testify before you today and for
all your efforts on behalf of working Americans everywhere. I would
also like to express my sincere gratitude that you have taken the time
to highlight the tremendous impact that the Voluntary Protection
Programs (VPP) have had for approximately one million workers like
myself across the United States through the combined efforts of the
Occupational Safety and Health Administration, management and labor.
I work as a process technician for LyondellBasell in Channelview,
Texas. This is a very large chemical processing facility with about
2,000 employees. We manufacture and process a variety of chemicals
which are used in countless products by consumers across the globe. We
have been a participant in the OSHA VPP program for nearly twenty
years. Management leadership and employee involvement, worksite
analysis, hazard prevention and control, and safety and health
programs, which are the elements of VPP, have been a major reason why
the Channelview facility is one of the safest places in the world to
work. In fact our YTD Total Recordable Injury Rate (TRIR) is about a
0.30. This is approximately 8 times better performance than the
chemical industry average of 2.4 based upon the Bureau of Labor and
Statistics latest information.
VPP is about developing a culture of safety and health excellence,
actively safeguarding personal lives and livelihoods and also those of
your coworkers, family and community. Cooperation extends beyond the
worksite to include industry and community outreach. The culture and
mindset of our employees is that everyone that enters our facility will
go home at the end of the day as safe and sound as when they arrived.
Safety is truly the number one priority. Anyone in our plant has the
right and obligation to stop and question anything that they feel may
lead to an injury or unsafe condition. This not only applies to
LyondellBasell employees, but to all of our contractors as well.
Participation in the VPP program has allowed our safety and health
programs to be driven by the employees. Everyone has the opportunity
and expectation to participate in a variety of ways. Management has
provided us with all the tools and training materials we need to not
only perform our jobs safely, but to also recognize potential hazards
and take action to eliminate the problem before an accident occurs. As
an operator in the field, I have been given the authority to initiate
and execute the shutdown of a unit, without any fear of reprisal from
management, if I feel that the safety and health of me or my coworkers
may be in jeopardy. This is the culture that exists at a VPP site.
There are many values of the VPP program and not enough time to
discuss them all today. I would like to share a success story with you
today about a major U.S. company as told to me by the safety and health
manager of the New England branch. It had been determined that this
branch was to be shutdown and relocated overseas where production costs
were cheaper. Today, this operation is still open for business in the
same location. The reason for this is due to a reduction in workers
compensation costs brought on by participation in the VPP program. It
became cheaper to produce their products in the United States rather
than overseas. The Voluntary Protection Program not only saves lives,
but saves jobs as well.
The spirit of cooperation between OSHA, Management, and Labor which
is the foundation of the VPP program, has been an extraordinary
success. Those who choose to participate are leaders in safety and
health and are proactive in protecting workers. I had the opportunity
last week to hear a speech from an OSHA officer at the Region IV VPP
conference in Chattanooga Tennessee. He made a comment that I would
like to quote. He stated that ``if my children had the choice of
working at a VPP site or a site where OSHA had made compliance visits,
he would without a doubt, recommend the VPP site.''
I want to thank you once again for inviting me to be here today. I
hope that you will support VPP program's continued success.
______

Chairman Walberg. Thank you.
Dr. Levine.

STATEMENT OF DR. DAVID I. LEVINE, TREFETHEN PROFESSOR OF
BUSINESS ADMINISTRATION, HAAS SCHOOL OF BUSINESS, UNIVERSITY OF
CALIFORNIA-BERKELEY

Mr. Levine. Good morning Mr. Chairman and members of the
committee. I am a professor at the Haas School of Business
where I taught for 25 years at the University of California
Berkeley. To put it mildly, OSHA has always been controversial.
While some criticize it for being too lenient, others are
concerned that it is a job killer that raises costs and erodes
America's competitiveness.
So what, in fact, does OSHA do? Michael Toffel of the
Harvard Business School, Matt Johnson of Boston University and
I answered this question for one type of OSHA inspection. Our
results appeared in Science, which is one of the world's most
respected academic journals. The inspections we studied protect
the health and safety of America's workers. They not only
improve safety, they do it with no discernible costs to
employers' survival, staying in business, and no cost to their
growth that we could detect.
Our analysis focused on inspections that Cal/OSHA in
California conducted at random in dangerous industries. That
means our results could be analyzed like a randomized trial, a
clinical trial for a drug. This is the most convincing type of
evidence when trying to evaluate a program.
Again, the bottom line is the inspections we studied did
what they were supposed to do. They reduced the number of
injuries recorded to workers' compensation systems by about 9
percent, and they reduced the cost of those injuries in terms
of medical care and wage replacement by 26 percent.
How much is that safety worth to employers? I have to go
beyond our data, but I can use estimates from the workers'
compensation insurer, Liberty Mutual, to add in the indirect
costs, the absenteeism and lower productivity. Those estimates
imply that each inspection is worth between, very roughly, 98
and197 thousand dollars for an employer over 5 years. To put
those figures in context, the employers we studied had about 34
employees.
If we include lost wages, each inspection averted as much
as $230,000 in social costs over 5 years. If we add a few more
assumptions, we can shift the national level. If all the OSHA
inspections were as valuable as the ones we studied, the
Liberty Mutual estimates imply that OSHA inspections could be
saving industry $9 to $18 billion a year. If we include lost
wages, OSHA inspections could be reducing the total cost of
injuries by as much as $22 billion a year.
This national experiment provided no evidence that the
inspections are harming employers. We found no evidence of more
bankruptcies, we found no evidence of lower sales or lower
employment. These OSHA inspections offer substantial value to
employees, their employers and society.
Why has it taken 40 years to get rigorous evidence about
the effect of OSHA inspections? It turns out that question is
hard. About half of OSHA inspections are workplaces that have
had a complaint or an accident. To think that OSHA inspections
cause high injuries at these workplaces is like thinking, boy,
a lot of people die in hospitals, we would all live longer if
we just close down the hospitals.
Fortunately for us researchers, OSHA does some inspections
at random in some dangerous industries. Because they are chosen
at random, we can get a scientifically valid result by
comparing those randomly chosen and those randomly not chosen
from the same industry, which is the method we used.
Most government programs, including OSHA's VPP, lack this
sort of rigorous evidence. If VPP had a rigorous evaluation
demonstrating the cost savings that it claims for employers,
more companies would join. I think more generally the executive
branch and Congress would have an easier time if major programs
routinely provided evidence about what works and what doesn't.
With that sort of evidence we could have a government that
works better and maybe more cheaply while still protecting the
health and safety of workers and all the other functions
government pursues.
I thank you very much for inviting me here, and I am happy
to answer your questions.
[The statement of Mr. Levine follows:]

Prepared Statement of David I. Levine, Haas School of Business,
University of California, Berkeley

Good morning, Mr. Chairman, and Members of the Committee. My name
is David Levine. I am the Trefethen Professor of Business
Administration at the Haas School of Business, University of
California, and Berkeley. My Ph.D. is from Harvard University, and I
have been a professor for 25 years at the Haas School of Business,
where I chaired the Economic Analysis and Policy group. I also co-
founded the Center for Effective Global Action, which promotes rigorous
evaluations of government programs and other projects around the world.
To put it mildly, OSHA has always been controversial. While some
criticize it for being too lenient, others refer to it as a job-killer
that increases employers' costs and erodes America's competitiveness.
What, in fact, does OSHA do?
Matthew Johnson of Boston University, Michael Toffel of the Harvard
Business School, and I answered that question for randomized
inspections carried out by California's Cal/OSHA. Our results appeared
in Science, one of the world's most respected academic journals.\1\
The bottom line of our study is simple: We analyzed randomized Cal/
OSHA inspections the way scientists analyze a clinical trial. These
inspections protect workers' health and safety. The randomly inspected
firms experienced 9% fewer injuries and had 26% lower workers'
compensation costs than the control group of similar firms.
Workplace inspections cause no discernible damage to employers'
ability to stay in business and no reductions in sales or credit
ratings, according to our research. Nor did we identify any effects of
workplace inspections on employment or wages. These inspections save
employers billions of dollars a year, and a figure that only grows when
we include injured workers' lost earnings.
The challenge of rigorous evaluations
Debates about OSHA's effectiveness have raged for decades When I
learned Cal/OSHA randomly selected some workplaces in dangerous
industries for inspections, I felt an obligation to use that natural
experiment to study the effects of these inspections.
It is understandable that debates rage on when evidence is scarce.
It is less understandable why, 40 years after its founding, so little
rigorous evidence exists on the effects of OSHA's activities. The
government--and taxpayers--would have a much better understanding of
which policies and regulations work well if policymakers built rigorous
evaluations into many more programs. We have moving stories of
regulatory successes and failures, of jobs lost and jobs saved. We have
no way to know how well those stories generalize of what would have
happened with stricter or less strict regulations or inspections.
Rigorous evidence is lacking in part because it is difficult to
measure the causal effect of OSHA inspections. One challenge arises
because many OSHA inspections target workplaces with recent accidents
or safety complaints, and these workplaces often have ongoing safety
problems. Thus, workplaces with inspections often have injury rates
that are higher than workplaces without inspections, but the
inspections did not cause the high injury rates.
A second issue is that workplace injury rates injury rates usually
decline soon after they experience a big spike upward such as after a
serious accident.\2\ If the spike induces inspectors to visit, the
inspection did not necessarily cause any subsequent decline in
injuries.
Fortunately for evaluation purposes, as I noted above, California's
Division of Occupational Safety and Health (Cal/OSHA) randomly selected
workplaces in dangerous industries for inspections from 1996 to
2006.\3\ From a scientific perspective, this randomization lets us
analyze our data as would date from a clinical trial for a new drug.
The resulting randomized controlled trial is the ``gold standard'' for
evaluation, the most convincing type of evidence when measuring the
effects of a program. Randomization is important because on average the
randomly inspected firms and the control group of firms we identified
are identical except for the luck of the ``flip of a coin'' that
determined whether they were inspected or not. That similarity makes it
possible to compare trends in the two groups and be confident that
inspections are responsible for any major differences.
An additional challenge for rigorous evaluation is that most
previous studies that examined how inspections affect injury rates have
relied on the injury logs that OSHA requires these companies to
maintain. This data source can be problematic because OSHA inspections
often find record-keeping is incomplete and mandate more complete
recordkeeping. If you looked at the injury trends recorded in these
logs, it could seem as if inspections caused higher injury rates,
simply because the company began documenting a greater proportion of
the injuries that were occurring. For example, the injury rates
reported by very large manufacturing plants more than doubled in the
late 1980s after OSHA imposed multi-million dollar fines on a few large
plants for poor recordkeeping.\4\
To avoid this problem we analyze injury data from the workers'
compensation system. Unlike OSHA-mandated logs, OSHA inspections do not
change incentives for workers' compensation recordkeeping.
While injuries are important, so are the costs of reducing those
injuries. Thus, in addition to injuries we also analyze company
survival, credit ratings, sales, employment and total payroll to look
for unintended harms from inspections.
Our research paper and supplementary materials detail how OSHA
randomizes inspections and how we constructed our dataset of 409
inspected firms and 409 controls. Our sample is single-plant firms in
hazardous industries in California. Each control firm is from the same
industry and region of the state as a randomly inspected firm. If we
had multiple potential controls we selected the firm most similar in
employment prior to the inspection.
Results on injuries and injury costs
Cal/OSHA's randomized inspections work as intended. Our analysis
indicates that on average randomized inspections reduce annual injuries
by 9.4 percent (Figure 1). This estimate of the decline in injuries due
to inspections was similar when we used a several different statistical
models and looked at several subsets of the data. There was also
evidence that the declines persist for at least 5 years (the longest
period we studied).

Results on unintended consequences
Even if the benefits are large, it is crucial to know how much
employers pay for these improvements in safety. Employees also want to
know how much (if at all) inspections threaten wages or employment (for
example, if improving safety raises costs substantially).
We find very similar survival rates for randomly inspected firms
and the control group. Specifically, 4.4 percent of the randomly
inspected firms did not survive until 2006, compared to 5.6 percent, of
control firms. The inspected firms had a slightly higher survival rate,
but the difference is not statistically significant. Results were
similar in analyses that control for pre-inspection characteristics
(see Table S7).
We also assessed whether inspections might lead companies to become
financially stressed, as measured by two Dun and Bradstreet indicators
of whether a company is a good credit risk. The results hint that
inspections increase creditworthiness a tiny amount--but the estimates
are nowhere near statistically significant (Table S8).
To assess whether random inspections might have impeded firm
growth, we examined employment, payroll, and sales (Figure 2). There is
no evidence that randomly inspected firms had slower growth in
employment, total earnings, or sales than control firms.

Discussion
In sum, workplaces that Cal/OSHA chose for a random inspection
subsequently experienced substantially lower injury rates and workers'
compensation costs compared to a matched set of workplaces that were
eligible for but not chosen for a random inspection. The lower injury
rates endured several years following the inspection.
These results are broadly consistent with recent findings of most,
but not all, previous research on OSHA inspections.\5\ While those
studies were typically careful, none had a randomized design that
separates the factors that led to the inspections with the effects of
the inspections.
It is interesting to calculate the savings employers enjoy from
lower injuries. The workers' compensation insurer Liberty Mutual's
estimates that each dollar of direct workers' comp costs implies
employers pay 2-5 additional dollars of indirect costs (e.g., from
lower productivity). Using our sample's mean workers' compensation
costs and estimated cost reduction following inspections implies a
randomized Cal/OSHA inspection averts $98,000 to $197,000 in direct and
indirect costs to employers and their insurers.\6\
If we also include lost wages for employees, then (with many
assumptions) our point estimate on injury costs implies that on average
the reduction in injuries in the five years following a workplace
inspection reduces medical costs and lost production and earnings by
roughly $230,000 (in 2011 dollars).\7\ This estimated five-year total
is roughly 10 percent of the average annual payroll of this sample of
employers.
State and Federal OSHA's conduct about 100,000 inspections per year
(96,956 in 2006, for example). Most of these inspections are carried
out by different regulators from the one we studied. In addition, about
half of the inspections are conducted in response to complaints or
accidents, not randomized within hazardous industries. With those
differences in mind, if all these (non-repeat) inspections happened to
be as useful as those we studied, Liberty Mutual's estimate on the
indirect costs of injuries that employers bear implies OSHA inspections
could save industry $9 to $18 billion per year.\8\ Including employees'
lost wages gives a very rough estimate that state and Federal OSHA
inspections could avert as much as $22 billion in costs of injuries and
illnesses per year.\9\
While we cannot rule out unintended consequences such as lower
employment or earnings, we find no evidence that inspections harmed
employees or employers. The estimates taken literally suggest
inspections increase firm survival, credit rating, employment, payroll,
and sales, though all coefficients are small and none approach
statistical significance.
Our results are also indirectly somewhat informative about the
value of OSHA regulations (and Cal/OSHA's sometimes-stricter
regulations). Imagine a scenario where most regulations were costly for
employers, but did little to improve safety. In that situation,
inspections enforcing those regulations would have few safety benefits
and would impose high costs. These costs, in turn, would lead to slower
firm growth, job losses and plant closures. In fact, we found the
opposite: randomized inspections led to substantial safety benefits and
no detectable job loss or plant closure. Thus, our results imply that
on average the Cal/OSHA regulations that employers comply with due to
inspections are not poorly designed and costly.\10\
Much more to learn
Our study has examined only a subset of companies (single-
establishment firms in high-hazard industries and with at least 10
employees) in one region (California), and an enforcement activity (not
consultations or voluntary programs). We also examined only a single
type of enforcement action: a randomized inspection, not those driven
by complaints or by serious accidents. And we studied just one
workplace-safety regulator, Cal/OSHA. Our method also does not measure
the impact that the threat of an inspection might have on other
workplaces, or the costs and benefits of regulations that are complied
with regardless of inspections.
It is important to replicate this study in other settings and to
use other rigorous study designs to examine the generalizability of our
results. Ideally, Congress and the Executive branch would encourage all
major programs to build more learning into their programs. Regulators
can also share more data (with appropriate protections of
confidentiality) to facilitate independent evaluations and could also
facilitate partnerships with organizations that have helpful ancillary
data, such as agencies with data from the worker's comp system. In
addition, an important complement to statistical studies is qualitative
research that examines how workplace regulations and inspectors affect
workers and employers.
As the GAO has emphasized, it is crucial that rigorous evaluations
be conducted for voluntary programs as well as enforcement.\11\ OSHA
reports that VPP participants have injury rates far below their
industry average.\12\ However, this encouraging news is not convincing
evidence of whether VPP causes improvements in workplace safety because
having an injury rate below the industry average is a requirement both
to join and to remain in the VPP.\13\
Rigorous evidence showing VPP saves companies money would help
encourage more employers to join. Rigorous evidence is equally
important for policy-makers, in part because voluntary programs are not
always effective. For example, two studies that evaluate environmental
self-regulation programs find no evidence they are effective at
improving environmental performance.\14\ More encouragingly, studies
have shown that the EPA's voluntary Audit Policy leads to improved
compliance on average15 but even it is not effective under all
circumstances.\16\
Many of the rigorous evaluation techniques I am advocating for were
invented roughly a century ago, in large part to study how to improve
farm productivity. While hardly the only factor, you all know trends in
agricultural productivity in the U.S. in the last century. In the last
half century pharmaceutical companies have run over a million
randomized trials, and the resulting discoveries are a significant
contributor to improving and lengthening lives. Nowadays high-tech
firms such as Intel and Google run thousands of randomized experiments
each year.
The OMB has recently pushed all Executive Branch agencies to build
rigorous evaluations into a substantial share of their programs.\17\ My
understanding is that OSHA has begun its own randomized trial. While
the Executive Branch actions are helpful, Congress has to choice to
take a leadership role and encourage even more major programs to
demonstrate their effectiveness. Our government could spend more
wisely, and potentially quite a bit less, if we invested more in
learning what is working and what is not.
Thank you, Mr. Chairman and committee members, for the opportunity
to appear before you today. I stand ready to answer any questions you
might have.
endnotes
\1\ David I. Levine, Michael W. Toffel and Matthew S. Johnson,
``Randomized Government Safety Inspections Reduce Worker Injuries with
No Detectable Job Loss.'' Science 336, 907 (2012).
\2\ J. W. Ruser, Self-correction versus persistence of
establishment injury rates. Journal of Risk and Insurance 62(1), 67
(1995).
\3\ California Department of Industrial Relations, 2005 Report on
the High Hazard Enforcement Program and High Hazard Consultation
Program (Division of Occupational Safety and Health, 2007), http://
www.dir.ca.gov/dosh/enforcementpage.htm, accessed September 2011.
\4\ J. P. Leigh, J. P. Marcin, T. R. Miller, An estimate of the
U.S. government's undercount of nonfatal occupational injuries. Journal
of Occupational and Environmental Medicine 46(1), 10 (2004).
\5\ For results finding (some or all) OSHA inspections predict
declines in injuries see:
A. Haviland, R. Burns, W. Gray, T. Ruder, J. Mendeloff, What kinds
of injuries do OSHA inspections prevent? Journal of Safety Research
41(4), 339 (2010).
W. B. Gray, J. T. Scholz, Does regulatory enforcement work? A panel
analysis of OSHA enforcement. Law & Society Review 27(1), 177 (1993).
J. Mendeloff, W. Gray, Inside the black box: How do OSHA
inspections lead to reductions in workplace injuries? Law & Policy
27(2), 219 (2005).
A. Haviland, R. M. Burns, W. B. Gray, T. Ruder, J. Mendeloff, A new
estimate of the impact of OSHA inspections on manufacturing injury
rates, 1998-2005. American Journal of Industrial Medicine (2012).
Baggs, B. Silverstein, M. Foley, Workplace health and safety
regulations: Impact of enforcement and consultation on workers'
compensation claims rates in Washington State. American Journal of
Industrial Medicine 43(5), 483 (2003).
At the same time, several older studies did not find any relation:
R. S. Smith, The impact of OSHA inspections on manufacturing
incidence rates. Journal of Human Resources 14(2), 145 (1979).
W. K. Viscusi, The impact of occupational safety and health
regulation. Bell Journal of Economics 10(1), 117 (1979).
J. W. Ruser, R. S. Smith, Reestimating OSHA's effects--Have the
data changed? Journal of Human Resources 26(2), 212 (1991).
While careful, none of these studies used a randomized design or
other method that assured the inspected firms were similar those in the
comparison group.
\6\ Workers' compensation costs for medical care and replacing
wages averaged $25,253 per year at the employers we studied. If
workers' comp costs fall 26%, that equals savings to employers of
$6566/year, or $32,829 over 5 years. The workers' compensation insurer
Liberty Mutual (2002) reports:
Each injury's indirect costs are far larger than its direct costs.
In fact, 56 percent of business executives from a range of geographic
locations, company sizes and industries surveyed by the 2001 Liberty
Mutual Executive Survey of Workplace Safety reported that businesses
faced between $2 and $5 of indirect costs for each $1 of direct costs.
Braun (2002) explains, ``Indirect costs are the result of down
time, lost production, training replacement workers, scheduling
changes, damaged equipment, filling out forms, and so on.'' Adding in
$2 to $5 of indirect costs per dollar of direct costs implies a
randomized Cal/OSHA inspection averts $98,000 to $197,000 in direct and
indirect costs to employers and their insurers.
This method does not count lost wages that were not covered by
workers' compensation, ignores the under-reporting of injuries
(Rosenman 2000; Biddle 1998), and includes data from inspected firms in
the mean workers' comp costs. Both this method and the method in the
following footnote ignore safety benefits lasting more than four years,
any reduction in pain and suffering, and (working in the opposite
direction) the discounting of future lower injury rates.
Because we are estimating cost savings I base these calculations on
the 26% reduction in workers' compensation costs we estimated in Table
1. Results of this calculation and those of the next 3 footnotes would
be smaller, but still large, if we conservatively based the
calculations on the estimate of roughly 9.4% fewer injuries due to
inspections.
Theodore W. Braun, ``Prevention through Design (PtD) from the
Insurance Perspective.'' Journal of Safety Research 39 (2008) 137--139
[http://www.cdc.gov/niosh/topics/ptd/pdfs/Braun.pdf], last accessed
June 19, 2012.
J. Biddle, K. Roberts, K. D. Rosenman, E. M. Welch, What percentage
of workers with work-related illnesses receive workers' compensation
benefits? Journal of Occupational and Environmental Medicine 40(4), 325
(1998).
K. D. Rosenman, J. C. Gardiner, J. Wang, J. Biddle, A. Hogan, et
al., Why most workers with occupational repetitive trauma do not file
for workers' compensation. Journal of Occupational and Environmental
Medicine 42(1), 25 (2000).
Liberty Mutual, ``Liberty Mutual Releases Latest Workplace Injury
Data'' Ergonomics Today. (April 19, 2002). [http://www.ergoweb.com/
news/detail.cfm?print=on&id=516], last accessed June 20, 2012
\7\ Leigh (2011) estimates the total cost of occupational injuries
and illnesses to employees was roughly $250 billion in 2007. If we
divide by 140 million workers, that comes to $1,786 in costs per worker
per year. The high-hazard employers we studied were about 3 times as
risky as the average firm in California. If California is as costly and
as risky as the rest of the nation, that implies about $5,357 cost of
occupational injuries and illnesses in our sample. With 34 employees
per firm in our sample, injury costs for these companies average about
$183,000 per year. If an inspection reduces all costs by the same 26%
we estimate for workers' compensation costs, then a Cal/OSHA inspection
averts roughly $47,000 in lower medical costs and lost wages per year.
If the effect lasts five years (as in Table 1, Column 4), the total
value to society of each inspection is very approximately $230,000. The
figures here are slightly lower than those in the Science article
because we now use estimates of the cost of injuries from Leigh (2011),
which appeared after our original calculations.
J.P. Leigh, Economic Burden of Occupational Injury and Illness in
the United States. Milbank Quarterly, 89(4), 728 (2011).
\8\ Footnote 6 estimated each randomized Cal/OSHA inspection saved
employers and their insurers an average of $98,000 to $197,000 in total
costs from occupational injuries. Multiplying by the 96,956 inspections
per year (minus 3% for repeat inspections) implies savings to employers
and their insurers of roughly $9 to $18 billion per year.
\9\ Footnote 7 built off of Leigh (2011) and estimated very
approximately $230,000 in reduced medical care and lost earnings due to
one Cal/OSHA randomized inspection. Multiplying by the 96,956 (minus 3%
for repeat inspections) inspections per year implies a social value of
(very approximately) $22 billion per year.
\10\ The increased compliance can be due to fixing a problem that
led to a violation, information provided by the inspector, or increased
awareness of safety concerns after an inspection.
\11\ GAO (2009) OSHA'S Voluntary Protection Programs, GAO-09-395
http://www.gao.gov/assets/300/290017.pdf
\12\ US Department of Labor, ``All about VPP.'' (2012) [http://
www.osha.gov/dcsp/vpp/all--about--vpp.html], last accessed June 19,
2012.
\13\ The evaluation challenge is made more difficult because even
looking at trends is not sufficient. As an illustrative example,
consider the extreme case where following the VPP method has no effect
on safety. Assume 100 firms with average injury rates for their
industries want to receive VPP recognition and so begin implementing
the VPP method. Two years later some firms will have injury rates below
their industry average, some still near the average, and some above.
Only the subset with declines can then join VPP. Even though VPP
methods have no effect on injuries in this example, only the firms that
purely by chance experienced a downward trend were allowed into the
VPP. Thus, we will observe: (1) VPP members have below-average injury
rates and (2) prior to implementing the VPP method their injury rates
were near the industry average. More generally, no matter how useful
the VPP methods are any simple comparison of trends that does not
identify those who implemented the VPP methods and failed to qualify
will over-estimate the benefits of VPP.
\14\ Andrew King and Michael Lenox. 2000. ``Industry Self-
Regulation without Sanctions: The Chemical Industry's Responsible Care
Program.'' Academy of Management Journal, vol. 43, no. 4, pp. 698-716.
J. Rivera, P. de Leon, and C. Koerber. 2006. ``Is Greener Whiter Yet?
The Sustainable Slopes Program after Five Years.'' Policy Studies
Journal, vol. 34, no.2, pp. 195-224. J. Rivera and P. de Leon (2004).
``Is Greener Whiter? The Sustainable Slopes Program and the Voluntary
Environmental Performance of Western Ski Areas.'' Policy Studies
Journal, vol. 32, no. 3, 417-437.
\15\ Michael W. Toffel, and Jodi L. Short. 2011. ``Coming Clean and
Cleaning Up: Does Voluntary Self-Reporting Indicate Effective Self-
Policing.'' Journal of Law and Economics, vol. 54, no. 3, pp. 609-649.
(Unlike OSHA's VPP, EPA Audit Policy participants are not promised
fewer inspections.)
\16\ Jodi L. Short and Michael W. Toffel. 2010. ``Making Self-
Regulation More Than Merely Symbolic: The Critical Role of the Legal
Environment.'' Administrative Science Quarterly, vol. 55, no. 3, pp.
361-396.
\17\ ``Use of Evidence and Evaluation in the 2014 Budget'', OMB
Memorandum to the Heads of Executive Departments And agencies May
18,2012 M-12-14 http://www.whitehouse.gov/sites/default/files/omb/
memoranda/2012/m-12-14.pdf
______

Chairman Walberg. Thank you.
Mr. Lee.

STATEMENT OF MIKE LEE, VICE PRESIDENT AND
GENERAL MANAGER, NUCOR STEEL DECATUR

Mr. Lee. Chairman Walberg, Ranking Member Woolsey, and
members of the committee, thank you for this opportunity. I
want to begin by asking you to imagine a program where
government auditors are invited by employers to conduct
comprehensive workplace regulatory compliance audits. Imagine a
government program built on trust and cooperation among
government and industry participants. Imagine a government
program that requires above and beyond regulatory standards
with a backlog of applicants trying to get in. Imagine a
government program that helps save lives, substantially reduce
injuries and improve the bottom line for businesses. It isn't
hard to imagine. It exists now in OSHA's Voluntary Protection
Program, or VPP.
I am Mike Lee, General Manager of Nucor Steel Decatur in
Alabama, where we employ over 700 teammates at our state of the
art sheet steel mill. I am also Vice President of Nucor
Corporation. With a production capacity that exceeds 26 million
tons, Nucor is the largest steel producer in the United States.
We are also one of the world's largest recyclers of any kind.
Nucor is made up of more than 20,000 teammates whose goal
is to take care of our customers by being the safest, highest
quality, lowest cost, most productive and most profitable steel
and steel products company in the world. That is our mission,
as forcefully stated by our Chairman and CEO Dan DiMicco. But
you can't be the most productive and profitable steel mill in
the world and not also be the best in safety. They all go
together. We believe we are the best, but we are always
striving to improve.
The cornerstone of Nucor's continuous safety and health
improvements is VPP. I am proud to have worked as a management
teammate as three of Nucor's OSHA VPP star sites work through
the process. Nucor Steel Hertford County, which became the
company's first steel mill to successfully complete OSHA's VPP
in 2006, Nucor Steel Nebraska, and now Nucor Steel Decatur.
OSHA's VPP is America's premier voluntary safety and health
program, recognizing the best of the best in employer safety
and health programs. Of the approximately 7 million U.S.
employers eligible for OSHA VPP, only about 2,375 have
qualified. That is only .03 percent, so that is quite an elite
group.
Nucor Corporation has 20 VPP sites and nine sites in
similar cooperative safety programs. All other members of the
Nucor family are working toward VPP. We also have 20 special
government employees from 13 divisions working alongside OSHA
professionals to improve workplace safety and health. Nucor's
safety goal, as is OSHA's, is zero incidents and accidents.
This is why we strongly support the cooperative government
industry approach of VPP. The foremost beneficiaries of VPP are
Nucor teammates who at day's end safely arrive home to their
families.
But there is also a significant benefit to Nucor. A safer
workplace means healthier and more productive teammates, better
morale, and a strong sense of teamwork.
VPP will not work if it is the sole responsibility of a
safety director, a safety cop if you will, looking over an
employee's shoulder, nor should it ever be necessary for an
OSHA inspector to be present to instruct every American worker
how to do his or her job safely. VPP is not a top down or
bottom up approach. It is a partnership between primary safety
stakeholders, OSHA, management, employers and employees.
To be a successful VPP, you have to trust your employees
and empower them to participate in their site safety and health
programs, and management cannot just give lip service support
for VPP. Managers and supervisors have to roll up their sleeves
and work at safety every day just as hourly workers must.
At our VPP site in Decatur, for example, we start every
meeting with a discussion of safety and health issues. We
recognize areas of potential concern and make plans to achieve
our safety goals. This activity occurs in every shift. Our VPP
culture invites our teammates to find, report and help us work
as a team to address opportunities for improvement.
A great example occurred just last week. In preparation for
Nucor Steel Decatur's upcoming VPP star reevaluation, we
invited nine team members from three other Nucor VPP star sites
to join our teammates in conducting a 2-day assessment of one
of our production departments. Not one of those folks was a
full time safety professional. They were all hourly production
men and women who make up our safety teams. That is VPP, taking
hourly operators and turning them into safety professionals
through leadership support, hazard recognition training, work
site analysis and effective safety and health training.
Perhaps I am a dreamer, but I am not the only one. I am
also a doer and so are thousands of VPP workers who are
practicing the VPP philosophy every day. The goal of zero will
never change. The Nucor-OSHA VPP partnership will continue to
drive improvements in safety and health. VPP works. VPP saves
lives, and Nucor Corporation is proud to be a part of it. Thank
you.
[The statement of Mr. Lee follows:]

Prepared Statement of Mike Lee, General Manager, Nucor Steel Decatur
LLC; Vice President, Nucor Corp.

Chairman Walberg, Ranking Member Woolsey, and members of the
Committee, thank you for this opportunity. I want to begin by asking
you to imagine a program where government auditors are invited by
employers to conduct comprehensive workplace regulatory compliance
audits.
Imagine a government program built on trust and cooperation among
government and industry participants.
Imagine a government program that requires above and beyond
regulatory standards--with a backlog of applicants trying to get in.
Imagine a government program that helps save lives, substantially
reduce injuries, and improve the bottom line for businesses.
It isn't hard to imagine. It exists now in OSHA's Voluntary
Protection Program or ``VPP''.
I am Mike Lee, General Manager of Nucor Steel Decatur in Alabama
where we employ over 700 teammates at our state of the art sheet steel
mill. I am also Vice President of Nucor Corporation. With a production
capacity that exceeds 26 million tons, Nucor is the largest steel
producer in the United States. We are also one of the largest recyclers
of any kind.
``Nucor is made up of more than 20,000 teammates whose goal is to
take care of our customers by being the safest, highest quality, lowest
cost, most productive, and most profitable steel and steel products
company in the world.'' That is our mission, as forcefully stated by
our Chairman and CEO, Dan DiMicco.
But you can't be the most productive and profitable steel mill in
the world and not also be the best in safety. They all go together. We
believe we are the best, but we are always striving to improve.
The cornerstone of Nucor's continuous safety and health
improvements is VPP. I am proud to have worked as a management teammate
as three of Nucor's OSHA VPP Star sites worked through the process:
Nucor Steel Hertford County, which became the company's first steel
mill to successfully complete OSHA's VPP in 2006; Nucor Steel Nebraska;
and now Nucor Steel Decatur.
OSHA's VPP is America's premier voluntary safety and health
program, recognizing the best of the best in employer safety and health
programs. Of the approximately 7 million U.S. employers eligible for
OSHA VPP, only about 2,375 have qualified. That's only .03 percent.
Nucor Corporation currently has 20 VPP sites and 9 sites in similar
cooperative safety programs. All other members of the Nucor family are
working toward VPP. We also have 20 Special Government Employees from
13 Divisions working alongside OSHA professionals to improve workplace
safety and health.
Nucor's safety goal, as is OSHA's, is zero incidents and accidents.
This is why we strongly support the cooperative government-industry
approach of VPP. The foremost beneficiaries of VPP are Nucor teammates
who, at day's end, safely arrive home to their families. But there is
also a significant benefit to Nucor: a safer workplace means healthier
and more productive teammates, better morale, and a strong sense of
teamwork.
VPP will not work if it is the sole responsibility of a safety
director--a safety cop, if you will--looking over an employee's
shoulder. Nor should it ever be necessary for an OSHA inspector to be
present to instruct every American worker how to do his or her job
safely. VPP is not a top down or bottom up approach. It is a
partnership between primary safety stakeholders: OSHA, management,
employers and employees.
To be successful with VPP, you have to trust your employees and
empower them to participate in their site's safety and health programs.
And management cannot just give lip service support for VPP. Managers
and supervisors have to roll up their sleeves and work at safety every
day just as hourly workers must.
At our VPP site in Decatur, for example, we start every meeting
with a discussion of safety and health issues. We recognize areas of
potential concern and make plans to achieve our safety goals. This
activity occurs on every shift. Our VPP culture invites our teammates
to find, report, and help us work as a team to address opportunities
for improvement.
A great example occurred just last week. In preparation for Nucor
Steel Decatur's upcoming VPP Star re-evaluation, we invited 9 team
members from 3 other Nucor VPP Star sites to join our teammates in
conducting a two-day assessment of one of our production departments.
Not one of these folks was a full-time safety professional. They were
all hourly, production men and women who make up our Safety Teams. That
is VPP--taking hourly operators and turning them into safety
professionals through leadership support, hazard recognition training,
worksite analysis and effective safety and health training.
Perhaps I am a dreamer, but I'm not the only one. I'm also a doer
and so are thousands of VPP workers who are practicing the VPP
philosophy every day. The goal of zero will never change. The Nucor--
OSHA VPP partnership will continue to drive improvements in safety and
health. VPP works. VPP saves lives and Nucor Corporation is proud to be
a part of it.
Thank you.
______

Chairman Walberg. Thank you.
Mr. Layne.

STATEMENT OF R. DAVIS LAYNE, EXECUTIVE DIRECTOR, VOLUNTARY
PROTECTION PROGRAMS PARTICIPANTS' ASSOCIATION

Mr. Layne. Chairman Walberg, Ranking Member Woolsey, and
members of the subcommittee, I am, like the other members of
the panel, I am particularly pleased to be here today to talk
to you about OSHA's Voluntary Protection Programs.
VPP started as a pilot program in California with Cal/OSHA
in 1979 before being federally adopted in 1982, and as of now
all OSHA State plans also have a voluntary protection program
covering over 2,000 work sites across the United States.
As indicated, I started with the Occupational Safety and
Health Administration in 1971 as a compliance officer. And
during that time it was very clear to me that our job in those
early days was to go out and make inspections, issue citations
and propose penalties. We were clearly told back then, don't
give any advice on how to abate conditions, don't--just go out,
make the inspections, write up your reports, issue your
citations.
And as time went on, as I moved up in the organization, the
Voluntary Protection Programs began to come to my attention.
And I never will forget my first exposure to Voluntary
Protection Programs. When I began to hear about it based upon
my earlier training I said, oh, what is this, this VPP thing?
Oh, let's go out and enforce. And then when I had an
opportunity to participate in some VPP evaluations, I said
something different is going on here, something very different.
And it became very apparent to me that there is a culture
change about workplace safety and health at VPP sites.
It is based upon the four elements of VPP: Management,
commitment and employee involvement, work site analysis, hazard
prevention and control, and safety and health training. These
form the basis of a superior workplace safety and health
program, and it had a positive impact on reducing injuries and
illness. And it really builds a sense of community and
cooperation among employers, employees and the Occupational
Safety and Health Administration. Employees feel more valued
and look out for the well-being of their peers and contribute
more to the workplace's safety and health program. It reduces
injuries and illnesses but also contributes to the bottom line
by increasing productivity and quality of product.
The only thing about VPP is it is proactive. It calls upon
participants to continuously improve their systems. VPP is not
some form of honor roll or special club that allows sites to
rest on their laurels. VPP sites must demonstrate not only that
they have maintained their low injury and illness rates, but
also how they continue to address any of the remaining hazards
and to improve their safety and health processes even further
or risk being removed or denied participation in the program.
And this dedication to continuous improvement also ensures that
VPP sites are able to address hazards that are new or emerging
in the workplace.
It is not any secret that OSHA's rulemaking process and
standards making process is severely broken. And that causes,
in many instances, for new hazards to be unaddressed in the
work site. And to give you a for instance on this, OSHA's
standard on pulp and paper mills has a number of national
consensus standards that were adopted when the act was passed
back in 1970.
For instance, the safety code for conveyors, cable ways and
related equipment for the pulp and paper industry is based upon
an ANSI standard that was written in 1957. Several other
portions of that standard also rely upon old standards. And VPP
sites will not limit themselves to the requirements established
during the Eisenhower administration. They seek to tackle all
work sites regardless of OSHA requirements, not just merely
comply with the current OSHA laws.
The Department of Defense has adopted VPP as a way to
address unsafe or unhealthy working conditions at Department of
Defense facilities. For instance, sites that have participated
in VPP range in cost savings to the American taxpayer anywhere
from 73,000 to $8.8 million a year.
There are 13 tenets of the Occupational Safety and Health
Act. One of them deals with enforcement, three of them deal
with working cooperatively with employers. And I hope in the
spirit we can all work together to guaranty VPP can continue to
thrive as America's premier program for workforce safety and
excellence. To echo Assistant Secretary Michaels before this
very subcommittee in October of last year, VPP saves jobs and
saves lives.
Thank you.
[The statement of Mr. Layne follows:]

Prepared Statement of R. Davis Layne, Executive Director,
Voluntary Protection Programs Participants' Association, Inc.

Thank you Chairman Walberg, Ranking Member Woolsey and members of
the subcommittee for granting me the opportunity to speak before you
today about the Occupational Safety and Health Administration's (OSHA)
Voluntary Protection Programs (VPP).
My name is Davis Layne and I currently serve as executive director
of the Voluntary Protection Programs Participants' Association, Inc.
(VPPPA). I got my start in the safety and health field working with the
U.S. Army Material Command Field Safety Agency and subsequently joined
OSHA in 1971 as a compliance officer, served as an area director in
three offices, a deputy regional administrator, a regional
administrator and retired as deputy assistant secretary for the agency
in 2004.
I was initially skeptical of VPP when I first encountered it as a
deputy regional administrator. However, after seeing the profound
impact it can have in workplaces of all sizes, I have come to believe
that there is simply no better approach to nurture a culture of safety
and health excellence.
Program History and Overview
VPP got its start as a pilot program with California's Division of
Occupational Safety and Health, also known as Cal/OSHA, during the
first Jerry Brown administration in 1979. The program proved to be a
tremendous success and was adopted by federal OSHA in 1982. Since then,
it has grown steadily through every administration and enjoyed
bipartisan support. Impressed by VPP's track record, the Department of
Energy (DOE) created its own version of the program in 1994 to address
the unique hazards its employees face. In 1998, federal government
worksites became eligible for VPP.
VPP is comprised of four elements: Management Commitment and
Employee Involvement; Worksite Analysis; Hazard Prevention and Control;
and Safety and Health Training. These four focuses form the basis of a
superior worksite safety and health culture that supports cooperation,
trust and innovation. After a worksite has maintained a VPP-quality
safety and health management system for at least a year, as outlined by
OSHA's VPP Policies and Procedures Manual, it then undergoes an
extensive qualitative audit of said system. This entails an onsite
inspection of the working environment, an examination of records and
documentation and interviews with employees. If all of these support
the criteria set forward by OSHA and the site has maintained injury and
illness rates below the average for its industry, then it will be
approved for VPP. On the whole, VPP sites have rates 50% below industry
averages.
Value for Participants
Aside from the direct impact on worker safety and health, VPP has
many important benefits for American businesses and communities. As
worksites come together to address occupational hazards, they build a
sense of community and trust that creates a beneficial cycle of
involvement. Employees feel more valued and look out for the well-being
of their peers and contribute more to the worksite's safety and health
efforts. Productivity and awareness rise because of reduced time away
from work due to injuries and illnesses and morale improves.
Another key component of VPP is outreach. Sites are encouraged to
share their knowledge and experience with industry peers and the local
community, benefiting an even larger section of the public. VPP
employees will often supplement their safety and health teams with
valuable initiatives emphasizing safety at home, environmental issues
or healthy eating. These fall outside VPP programmatically, but they
demonstrate how eager these workers are to use the organizational
framework and attitude of VPP to effect other positive changes.
By taking part in VPP, worksites are inviting OSHA to their site.
Estimates often point out that it would take OSHA more than 130 years
to randomly inspect every American worksite, and more than 70 years in
those jurisdictions with state programs. VPP employees have the benefit
of working with regulators to improve their safety and health programs
and share information and best practices. Most Americans will never
interact with OSHA, or they will only if something has gone horribly
wrong.
Additionally, VPP is a proactive program that calls on participants
to continuously improve their systems. It is not some form of honor
roll or a merit badge to be earned. Sites that rest on their laurels
and only maintain the work that earned them entry into VPP will not be
re-approved. They must demonstrate how they have continued to work to
address any remaining hazards or improve their processes even further.
This also ensures that VPP sites are able to address hazards that
are new to the working environment and unaddressed by OSHA regulations.
Many OSHA standards have not been updated since the administration was
formed by the Occupational Safety and Health Act of 1970. Some are even
more outdated because those initial standards are based on even older
legislation and rules. For example, the Safety Code for Conveyors,
Cableways, and Related Equipment for the pulp and paper industry is
based on an industry consensus created in 1957. Several other portions
of the standard rely on guidance that also predates the formation of
OSHA. VPP sites are not content to limit themselves to requirements
established during the Eisenhower administration. Because of the slow
nature of new standards being formulated and implemented, many hazards
can remain inadequately addressed for long periods of time. VPP sites
seek to tackle all hazards at a worksite, regardless of OSHA
requirements, to best ensure the health and safety of their employees.
A Competitive Edge
The effectiveness of VPP yields indirect advantages for employers
as well. Compensation costs are an often overlooked expense for
employers. By reducing time away from work and bolstering morale, VPP
can improve productivity. The National Safety Council estimated that
the program saved private industry $300 million in 2007. Additionally,
federal agencies saved $59 million that same year. Several participants
have shared that they believe their operations would have been
relocated abroad because of cost considerations had they not pursued
VPP status.
It is for these numerous benefits that many of America's top
companies have VPP sites, including: General Electric, Raytheon,
Honeywell, IBM, Amazon, 3M, Kraft Foods and Morton Salt. But smaller
employers also find success with VPP. Wenner Bread Products in Bayport,
N.Y. has experienced a tremendous change in their workplace
environment. Elisonia Valle, assistant manager to human resources at
Wenner, shared, ``Pusuring VPP has been an overall rewarding experience
for the Wenner family [* * *] Wenner Bread has experienced improved
labor relations within the bilingual workforce, which led to an
increase in productivity and an increase in product quality.'' VPP
provides these small businesses with a proven process for establishing
a safety and health management system and the resources of hundreds of
other sites eager to reach out to interested companies.
VPP worksites represent the breadth of the American economy, with
approximately one million workers at approved sites across more than
400 industries. These are not limited to large manufacturing and plant
environments either; office locations have been approved for VPP,
addressing the ergonomics and other hazards faced by an increasing
percentage of the nation's workforce. More than 46% of VPP worksites
have less than 100 employees.
Organized Labor's Vital Contribution
Unions at prospective VPP sites are involved in every step of the
process to attaining VPP status. As part of overall employee
involvement, union participation and contributions are considered
vital. Any union, even if it is one of many at a worksite, can halt a
site's preparation for VPP. This also holds true for existing VPP
sites. Any union can remove its entire site from the program. This veto
power exists to ensure that all parties at a worksite are committed to
safety and health excellence; if there is any concern that this goal is
being jeopardized or sidelined, employees are not locked into
continuing to pursue VPP approval or remaining in the program. Because
of this safeguard that emphasizes the voluntary nature of VPP, more
than one quarter of approved worksites host unions.
Some prominent examples of unions involved in VPP include: American
Federation of Government Employees, United Steelworkers, International
Association of Machinists and Aerospace Workers, International Union of
Operating Engineers, International Brotherhood of Electrical Workers,
Communications Workers of America and Service Employees International
Union.
DoD Experience
In 2005, the secretary of defense set a goal of reducing the
Department of Defense's (DoD) preventable injuries by 75% from 2002's
recorded levels. Subsequently, the Defense Safety Oversight Council
(DSOC) recommended that that the department should utilize VPP to reach
this goal and the DoD Voluntary Protection Programs Center of
Excellence (VPP CX) was formed to see this through. Currently, more
than 40 DoD sites across services and agencies are approved as VPP
sites with dozens of others pursuing VPP status.
The military views the safety of its employees as a key component
of mission readiness. DoD VPP sites have averaged 69% lower incidence
rates and 62% lower lost day rates. This has improved both morale and
productivity at these locations. VPP CX holds that this has increased
available military end strength and force readiness.

Since starting the DSOC and VPP, DoD has experienced a 40%
reduction in Civilian Lost Time, resulting in $149,000,000 in savings
in Fiscal Year 2010. Corresponding cost savings from VPP participation
due to lower rates range from $73,000 to more than $8.8 million per
site. For instance, Pearl Harbor Naval Station has saved $8 million
since implementing VPP and realized a 40% reduction in their injury
rate.
Lieutenant General William E. Ingram, Jr., director of the Army
National Guard, supports VPP's mission: ``Mutual commitment and
accountability are fundamental to such pacesetting actions as the
Occupational Safety and Health Administration's Voluntary Protection
Programs, and the Guard must continue to set an example for our
Soldiers by implementing such proven initiatives.''
An Asset and a Resource
In the past, some have called for companies to pay for their VPP
approval. This is a misguided policy proposal and is essentially
tantamount to, as one participant has put it, ``buying the VPP flag.''
It would also ruin the independent nature of the VPP process; program
administrators would have perverse incentives to maximize the revenue
generated by fees, potentially overlooking rural, isolated and smaller
sites as a result. OSHA estimates that the program costs more than $3
million to run annually. This figure is unequivocally dwarfed by the
direct savings realized by government participants, the indirect
benefits received by private industry and the human resources committed
by participating companies.
In addition to the vast savings realized by DoD, other government
worksites benefit from VPP. DOE runs its own VPP program that addresses
the different hazards faced by its employees. Additionally, locations
as varied as the U.S. Mint in Philadelphia to the Kennedy Space Center
are participating VPP sites. Colonel Robert Cabana, director of the
center, states that, ``Although we were already safe, VPP takes you to
that next level, with strong management attention, strong contractor
attention and strong workforce involvement. It really makes a
difference; it's teamwork, it's pulling together.'' Federal Government
sites save millions in tax dollars as outlined previously.
Because VPP sites seek out new and more efficient ways to address
hazards, they often create best practices that OSHA can share with
their industry peers. Through the Special Government Employee (SGE)
Program, something unique to VPP, sites are able to share their
expertise even further. SGEs, after receiving training from OSHA, are
sworn in to serve as temporary government employees on VPP audits to
supplement up to half of the auditors assigned. This not only frees up
OSHA resources, but also contributes years of knowledge and industry-
specific experience. A given evaluator cannot be familiar with every
work task and its associated hazards in the entire American economy.
SGEs provide OSHA with the ability to ensure that VPP sites are truly
delivering superior protection for their employees. Moreover, because
VPP operates in a spirit of cooperation, this is another opportunity
for best practices and ideas to cross-pollinate between different
worksites that normally would not interact. SGEs receive no pay from
the government and their travel costs are paid by their companies. If
OSHA uses 330 SGEs in a given year, then using moderate estimates for
travel expenses and lost work time, VPP companies contribute at least
$2 million to the program through SGEs per year.
Furthermore, acting as a force-multiplier, VPP frees up resources
for OSHA as VPP site representatives become advocates for safety and
health excellence, engaging in outreach and training so that other
sites can improve their safety and health as well. As OSHA expresses
it, VPP serves as a ``corps of ambassadors enthusiastically spreading
the message of safety and health system management. These partners also
provide OSHA with valuable input and augment its limited resources.''
Incentive Programs
The VPP Policies and Procedures Manual, as established by OSHA,
originally stated that incentive programs should not be based solely on
rewarding employees for lower or no safety and health incidents.
Additionally, it held that evaluations should look at existing programs
with a specific eye on how they could impact reporting and the veracity
of injury and illness data. With the release of VPP Policy Memorandum
#5, this policy has shifted so that any program that has the
``potential to discourage worker reporting'' disqualifies a company for
VPP. While auditors have the discretion to allow worksites a brief
window to alter their incentives programs or award them VPP on the
condition that they do so, some VPPPA member companies have been told
that any incentive program, regardless of its nature, could jeopardize
their status.
Also, OSHA did not think out all of the implications of this new
policy and overlooked the fact that collective bargaining agreements
can include stipulations on incentives and would need to be
renegotiated in order to comply with this policy change. The
administration now occasionally allows worksites in this situation more
time in order to accommodate renegotiation. This makeshift solution
disadvantages worksites without collective bargaining agreements that
must comply with the policy in a shorter timeframe.
The Government Accountability Office (GAO) published a report in
April 2012 on the subject of incentives programs, ``Better OSHA
Guidance Needed on Safety Incentive Programs.'' This report recommended
that OSHA should expand the policy set forward by VPP Policy Memorandum
#5. The data backing up this conclusion is tenuous at the very best. Of
the 26 studies utilized by GAO, only six examined the effectiveness of
incentive programs, and of those, only two studied the effect on injury
and illness reporting. The results of these two were inconclusive
according to GAO: ``Three studies--including the two that specifically
evaluated the programs' effect on reporting of injuries--focused on one
type of safety incentive program and found that their effect on
workplace safety was inconclusive or that the programs had no effect.''
To my knowledge, none of these studies took place at a VPP worksite.
This begs the question as to why OSHA is specifically applying
incentives guidance to VPP worksites, which, unlike other worksites
under its jurisdiction, already have to have their incentive programs
qualitatively reviewed by OSHA auditors. The administration should
restore its policy on incentive programs as it originally existed in
the VPP manual.
Guaranteeing VPP's Continued Success
VPP has received strong backing from every administration since its
inception and the number of participants has grown steadily until very
recently. During the administration of President Clinton, then-
Assistant Secretary of Labor for Occupational Safety and Health Joseph
Dear highlighted VPP as ``the premier example of partnership between
government, management and workers, and is a model for virtually all of
OSHA's reinvention initiatives. These are the companies where you want
your family, your children, your husband or wife to work.'' Former
Vice-President Al Gore celebrated the program's emphasis on
cooperation: ``It is about working in partnership with common goals,
instead of as adversaries, to protect the safety and health of our
workers. It's about focusing a lot less on red tape, and a lot more on
results.''
This support has continued under the current administration.
Assistant Secretary of Labor for Occupational Safety and Health Dr.
David Michaels has repeatedly emphasized the importance of VPP and the
commitment of time and resources by participating companies, stating,
``We do as [much] compliance assistance as we do enforcement
inspections. We're going to keep doing that. We want employers to come
to us and say, `We want to do everything we can.' We think the best
model for that is the Voluntary Protection Program. The companies in
VPP know how to do it, they've made the commitment and put the
resources into it, and we certainly support that.''

Unfortunately, the evenhanded approach cited by Dr. Michaels has
not been borne out by some of OSHA's recent choices. Funding for OHSA's
Compliance Assistance-Federal budget category, of which VPP constitutes
a small portion, grew slightly and leveled off over the past decade.
This has not kept pace with the growth in federal enforcement or OSHA's
overall budget. While this funding comes from Congress, OSHA has chosen
to direct resources away from VPP, which it estimates costs over $3
million annually and utilizes approximately 40 full-time equivalents
(FTE). For comparison, compliance assistance-federal's fiscal year 2012
allotment of FTE is 295 and the Department of Labor (DOL) as whole uses
more than 2,300 FTE.
In DOL's Fiscal Year 2013 Budget Request, it seeks to remove 31 FTE
and over $3 million from compliance assistance-federal. This will have
a direct impact on VPP as OSHA says that it plans to approve just 60
new VPP sites, a number that has been falling steadily since 2007.
Interest in VPP has not fallen over time; OSHA has chosen to move its
resources away from VPP of late. I have heard from several of VPPPA's
members concerning applications for approvals and re-approvals that
have been delayed for well over a year. At this rate, it appears that
OSHA is not even keeping up with its obligations to re-approve those
sites in order to maintain the program. The fact that the number of
active VPP sites has decreased over the past couple years supports
this. Dr. Michaels spoke recently to a safety and health group and
commented that the program had gotten too large and that budget
cutbacks were to blame for this slowing pace. OSHA's compliance
assistance-federal funding has not seen a drastic cut as of yet, so the
administration is choosing to divert resources away from VPP. The
program has grown steadily in past years and I cannot see why anyone
would prevent it from continuing to do so considering the profound
impact that has had at worksites in both the private and public
sectors. Former Assistant Secretary of Labor for Occupational Safety
and Health John Henshaw put it best: ``I know we all will agree that
VPP adds so much value that we cannot deny workplaces, who qualify, the
opportunity to participate and grow into the programs.''

Conclusion
The Occupational Safety and Health Act of 1970 requires 13
objectives to be accomplished. Only one of the 13 objectives is
enforcement. Three are directly related to the development of
cooperation between employer and employee to establish a safe
workplace: exactly what the founders of VPP established the program to
accomplish.
I'm sure everyone has heard the phrase, ``You can't prove a
negative.'' When debating issues of workplace safety, this can seem
especially true; there is no way to concretely prove whether an
accident might have been prevented or a small business owner saved X
number of dollars because of particular policy initiatives. But from my
entire experience with VPP, from a young, skeptical deputy regional
administrator for OSHA through retiring as the administration's senior
career employee, I can say this with complete confidence: VPP works.
Regardless of the dollar amounts or safety figures, there is something
tremendous about the culture that VPP promotes. It is truly about
involving everyone to incessantly strive to make our lives safer and
healthier. I hope that in this spirit we can all work together to
guarantee that VPP can continue to thrive as the America's premier
program for safety and health excellence. To echo Assistant Secretary
Michaels before this very subcommittee in October of last year, ``[VPP]
saves jobs and it saves lives.''
______

Chairman Walberg. Thank you. And I thank the witnesses for
generally staying very much on time or under time. So I thank
you for that.
I recognize myself for 5 minutes of questions. Let me ask
Mr. Layne, you clearly have many decades and I say that with
admiration.
Mr. Layne. And I accept it that way, sir.
Chairman Walberg. Not just chalking up years--we will hang
together right--with VPP. In your opinion, how has VPP expanded
and promoted safe workplaces since you first became involved
with VPP?
Mr. Layne. Well, when I first got involved with VPP, it was
a very, a program that was new to the agency and employers
didn't really understand what it was about. As a matter of fact
we used to go out and help employers develop their applications
and work with them and actually get them to submit the
application. It was one on one. But over the years, as work
sites began to understand the value added of the VPP program in
reducing injuries and illnesses and contributing to the bottom
line of the work site, that more and more work sites began to
pick up on the VPP process, and part of that process is that
all those workers at VPP sites become ambassadors for workplace
safety and health. And they began to outreach to not only
coworkers, but community members, and they take the concepts of
safety and health home and to their families. And as those
families and children begin to grow up and enter the workforce,
they carry that culture with them.
So the VPP programs have had a significant impact on having
work sites, as you had mentioned, that were some of the bad
actors in the past to saying, okay, we are going to use VPP as
a vehicle to change our culture about workplace safety and
health.
Chairman Walberg. So best practices have been expanded
exponentially outwards as opposed to just a single source
systemically?
Mr. Layne. Yes, sir.
Chairman Walberg. It appears that OSHA's funding levels for
compliance assistance which VPP funding can be found have
recently been cut, while OSHA's overall budget and their budget
for Federal enforcement has increased dramatically. Have there
been any consequences for OSHA's decision to keep these funding
levels flat in relation to your total budget?
Mr. Layne. Well, we were disappointed in the President's
proposed budget for fiscal year 2013 when in that budget there
was a projection of only doing 60 new VPP evaluations that
year. And we began to realize that not only is the VPP program
beginning to have a reduction in productivity, but also all of
the compliance assistance programs, if you look at the data on
it, show that there is a downturn in all of the OSHA's
compliance assistance activities.
Chairman Walberg. So across the board.
Mr. Layne. Across the board, not only in VPP but also in
all of their SHARPs programs, their consultation programs as
well.
Chairman Walberg. Even with increasing funding for general
OSHA?
Mr. Layne. Yes, sir.
Chairman Walberg. Mr. Lee, we have seen impressive
statistical evidence that validates our understanding that VPP
improves worker safety and health, your testimony included.
From my understanding, the average VPP workplace has a days
away restricted or transferred case rate, or DART case rate,
that is 50 percent lower than industry averages.
How does VPP help improve worker safety and health across
Nucor Corporation, and more specifically, how has it helped you
in your Alabama mill?
Mr. Lee. At Nucor, as a corporation, our DART rate, days
away restricted time, is actually 75 percent lower than the
industry average. So as a corporation, we have really improved
from a safety perspective through the VPP system.
Now one thing I will note as a division becomes, starts to
enlist itself in VPP and striving to become VPP certified and
ready, the division begins to improve just from the work effort
and the attitude and the folks and the culture kicks in. But
from the perspective of Nucor Decatur, we are actually 100
percent of the DART rate today as our DART rate through today
is zero. So we are having a very good year and our DART rate
over the past couple years is very, very good as well and a lot
of it has to do with VPP attitude and folks working together in
collaboration.
And I will state a little bit about the relationship
between OSHA VPP and Nucor. It has grown to the point where it
becomes personal. I personally have called up our VPP Region 4
administrator and asked him questions about things that may
have happened yesterday or an incident that may have happened
and how can I handle it? We discuss ideas back and forth
openly.
Chairman Walberg. As a partnership ought to be.
Mr. Lee. As a partnership as opposed to what OSHA, the
cloud of what OSHA is. When the OSHA came to the door 20 years
ago, that was not a good day. But today, with OSHA VPP and
working together collaboratively, it is a--who better to use as
a liaison in safety and improving safety in a workplace than
OSHA? And that is the position that we are in as a company and
our division when you can openly talk to the chairman of the
VPP Region 4 and not without any concern or worries about what
this may lead to.
Mr. Levine. Mr. Chairman----
Chairman Walberg. My time has expired but you will have the
opportunity.
Before I recognize the senior member for her questioning,
to report on the report that has just come from the Supreme
Court because some of you might be interested, the individual
mandate survives as a tax, said to be constitutional. Justice
Roberts joined the majority. Appears that the law will stand,
still working out the details, so we will keep you informed.
Ms. Woolsey. Smile.
I think you are calling on me next.
Chairman Walberg. I am calling on you.
Ms. Woosley. Thank you, Mr. Chairman.
When Mr. Lee is testifying, it is very clear to me 20 years
ago when I was human resources manager of a startup
manufacturing company with 800 employees under Cal/OSHA, that
we were a VPP company because we did exactly--this is 20 years
ago--exactly what you are doing now, Mr. Lee.
So, Jordan, Mr. Barab, why don't all work sites have the
same values as VPP? What gets in the way?
Mr. Barab. What gets in the way, there are a lot of--
unfortunately as you are aware, there are still 4,500 workers
that are killed in the workplace every year, over 4 million
injured in the workplace every year. Clearly there are a lot of
workplaces out there that just still don't get it that are
trying to cut corners, save a buck, just have no real concern
with worker safety. And that is why we do try to focus on those
workplaces that really need, unfortunately, need enforcement,
need much closer oversight.
Ms. Woolsey. And aren't there some VPP companies that have
had accidents and deaths that remain in the system as VPP and
what is happening with that?
Mr. Barab. Well, we hope no longer. Yeah, we were made
aware both through the 2009 GAO report in addition to the press
reports since then of several incidents in companies where
there were either fatalities, serious injuries, willful
citations in some cases, and the companies in question were
still allowed to stay in VPP. We were asked, or told, by the
GAO to monitor VPP more carefully, make sure that every company
in VPP really deserves to be in VPP.
And as I said in my testimony, the real value of VPP is not
really in the numbers, we have a few more, a few less but
really in the quality of the program, the integrity of the
program. So that really is our primary focus right now. Again
we greatly value this program, but it has to be a program that
has that kind of quality.
Ms. Woolsey. So where are we in having enough inspectors
for OSHA in general and VPP specifically?
Mr. Barab. Well, as you have heard, we have over the last
several years increased our enforcement presence. We need to
have a very balanced program. And right now our program is not
in balance, most particularly in the area of whistleblower
protection. As has been repeated here many times, we have
really only a comparatively few number of inspectors in terms
of the enormous number of workplaces to be reached every year.
That is why the creators of the Occupational Safety and Health
Act gave workers rights because workers need to be the eyes and
ears of OSHA or else the whole law doesn't work.
But in order for workers to be those eyes and ears, they
have be relatively secure that they are not going to be
retaliated against. So we need to enforce that part of the law
and that is why we have been trying to balance our program and
really try to increase one area where we really have not had
sufficient resources, and that is in our whistleblower
protection. So that is really the one area in our 2013 budget
that we are increasing to try to protect those rights of
workers without retaliation.
Ms. Woolsey. Thank you. Dr. Levine, your testimony
suggested that that there is a lack of evidence regarding the
effectiveness of VPP. Why do you say that? And what questions
need to be asked and answered in a study on VPP to
scientifically assess its effectiveness?
Mr. Levine. The GAO brought up some really terrible news
stories. We can balance those with the really inspiring example
of the folks I am sharing the table with today.
We need to know on average what is going on. Just looking
at the very low injury rates in VPP members isn't all that
convincing because you need a low injury rate to get in and to
stay in. So that is not really showing what the value added is.
Just looking at who gets in isn't even convincing because
unless the VPP program is working, you are not eligible to get
in.
So you have to look at a whole set of companies or
workplaces before they get in as they start to try and see what
happens. So one could take a large group of Nucor plants or
Federal Department of Defense workplaces and see as they start
to work on it what happens to their injury rate and compared to
those that start early and late. Ideally you would randomize
which ones went first, but the really wonderful stories or the
really terrible stories, are not going to tell us what is
happening over all. We want larger sample and----
Ms. Woolsey. You had something you wanted to respond to the
Chairman.
Mr. Levine. We surely know that when it is done right, the
results are fantastic and it is a privilege to be up here, that
we don't yet know how representative those results are, and VPP
like most Federal programs could use more rigorous evaluation,
so you and leaders in the executive branch have the evidence to
make those decisions about what saves lives or whatever other
goal of the program.
Chairman Walberg. Thank you. The gentlelady's time has
expired. I recognize the gentleman from Indiana, Mr. Rokita.
Mr. Rokita. Thank you, Mr. Chair. For the record, I would
like to enter a June 6, 2012, letter from Mr. Layne's VPP
association, please.
Chairman Walberg. Without objection so ordered.
[The letter follows:]

------

Mr. Rokita. Thank you. My questions go to Mr. Barab.
Are you aware of this June 6 letter that I entered into the
record? Do you need a copy of it? It outlined three recent
changes in OSHA policy towards the VPP program.
Mr. Barab. You are talking about the incentive program? Is
that what you are referring to?
Mr. Rokita. Yes. What specifically is your department doing
to try to resolve these issues outlined in the letter?
Mr. Barab. We introduced, we issued our incentive program,
the current version of the incentive program a year ago. And in
that year, I think we have found ourselves in a position of
having to terminate one company. A couple of other companies
withdrew, but most companies when we raised these issues with
them have withdrawn their policies voluntarily.
It is an important issue. We really don't want to and I am
sure VPP doesn't want to be in a position where they have
policies that discourage reporting.
Mr. Rokita. Right.
Mr. Barab. Our challenge is obviously is to make this
policy consistent throughout our regions. This is a constant
challenge for OSHA trying to make our enforcement policy
consistent, our compliance assistance policies consistent.
Mr. Rokita. Why do you think that is?
Mr. Barab. Well, we are a large agency, we have 10 regions
across the country, we have many, many different standards and
policies we need to enforce. It is definitely a challenge to be
consistent throughout the country, not just for our incentive
program for VPP in total and enforcement. And it is something I
think we do a pretty good job of. But it is a constant
challenge.
Mr. Rokita. One of the things that Mr. Layne outlines in
the letter is he says that some of his members have been told
that any incentive program regardless of its nature or content
can jeopardize that member's status within the program. Do you
support that?
Mr. Barab. That is not the case. We are only concerned
about incentive programs that have the potential of
discouraging reporting. Incentive programs, and these are
mainly rate based programs where they are focused on injury and
illness rates.
Now, on the other hand, you have incentive programs that
incentivize positive actions, such as participation in health
and safety committees, participation in training, reporting
near misses, for example. These are great things to
incentivize, and we strongly encourage companies to have
policies that provide those incentives.
Mr. Rokita. Thank you.
I will go to Mr. Layne. Do you see that being resolved or
not? Do you agree with what has just been said or not?
Mr. Layne. I understand Deputy Assistant Secretary Barab
indicated when OSHA at first came out with their change on
incentives at VPP work sites, we did have discussions with the
Occupational Safety and Health Administration. And as a matter
of fact when Assistant Secretary Michaels at our Orlando annual
conference addressed this, the statement was that work sites
that have incentive programs that focus primarily on injury and
illness rates would be unacceptable. When the policy memo came
out, and there was a letter before that, it came out a little
bit different saying basically saying if there was the
potential to have an adverse impact on reporting of injuries
and illnesses, and that is very different from being based
primarily on it.
So we work with the Occupational Safety and Health
Administration, but we are still getting some feedback from our
members that there is some problems with the way the incentive
program is being interpreted by OSHA.
Mr. Rokita. Thank you, Mr. Layne. And Mr. Barab, do you see
Mr. Layne's problem there?
Mr. Barab. Yeah, I think I understand the problem. We are
trying to educate companies about this, educate VPP about this.
But, again, it has not been a big deal quite frankly. Again we
have only had to terminate one company. Others have seen the
light, I guess, and seen our point and withdrawn their
policies.
Mr. Rokita. Thank you, Mr. Barab. I am running out of time.
Mr. Henson, I would like to get this question in if I
could, please, sir.
In your position with Channelview, what types of training
do you receive related to VPP compliance specifically and then
also what types of training do you receive related to OSHA
regulations more generally?
Mr. Henson. Well, we have various things that we have to
train. We have our quarterly computer-based training which goes
over all of our life critical procedures, everything that we do
as far as our safety and health programs which is all part of
being in the VPP program. It makes up the entire system of
things that we have to be held accountable for.
We participate in hazard recognition audits. We have folks
who receive extra training in hazard recognition. There is just
various programs, and that is how our incentive program is
based, is that it is based on our participation, as Mr. Barab
stated. That is what they are looking for. It is not based on a
number, it is based on our participation.
Mr. Rokita. Thank you. Mr. Chairman, my time is expired.
Chairman Walberg. I thank the gentleman. And now I
recognize the gentleman from Wisconsin, Mr. Petri.
Mr. Petri. Mr. Chairman, thank you for allowing me to
participate in the hearing. I just have one or two questions.
In this Congress I work as chairman of the Aviation
Subcommittee, and we obviously spent a lot of time on aviation.
Aviation is perceived to be risky, although it is the safest
mode of travel in the United States. That didn't happen
overnight, but the industry has worked very hard and the
government to set in process processes that result in
continuously safer aviation travel.
There has been a lot of debate about which approach is most
effective, but there is a growing consensus that a
collaborative approach makes the most sense because no one
really wants an accident that can happen because people are
people and something dumb happens or maybe something is
misdesigned or 101 reasons. But better to get it out and
investigate and let other people know and then make changes to
be continuously more safer.
So the VPP program is one that I think has a lot of promise
for improving safer procedures by working in a collaborative
way to improve the conditions for workers rather than an ``I
gotcha'' approach.
My question is, for Dr. Levine, because I understand the
importance of having random selection of workplace safety
tests, but employers in my district are constantly complaining,
not about being randomly selected, but about the big difference
in quality of inspection by different inspectors.
Did you randomly select the inspectors, or were they
people--were the inspections done in collaboration with, you
know, California OSHA's people so that they had their top
quality inspectors out there? How did this process really,
really work?
Mr. Levine. So we analyzed all the data we could find on
all the randomized inspections. The research I did was not done
in cooperation with Cal/OSHA. We interviewed them to understand
their data and their procedures. We have talked to a lot of
inspectors, but this wasn't--they did the randomized
inspections, and we came in and analyzed the data afterwards.
So we analyzed data on every randomized inspection we could
find so that it is all the inspectors they put into their high
hazard unit. It wasn't selective.
We don't know the identity of the inspectors, so we
couldn't look at differences by inspector. That wasn't part of
the publicly available data.
Mr. Petri. Well, this is all anecdotal and but very few, I
mean, most people who are in business for a while anyway really
want to be safe, and they know there are people in their
industries that may be a problem, so they don't object to
having some kind of a program as long as it is sensible to
promote best practices and enforce them where necessary on bad
actors in their own industry or whatever.
So OSHA has had a great success working collaboratively
with trade associations and others at seminars and being
proactive and all of this. But what I hear is that
occasionally, especially new people to the business of
inspecting will come in and assume the employer is a bad guy
and the employer has resorted to leaving a few things around
that they can find that won't be too--because they know they
are going to get fined. That is the mentality that they have.
After a while people calm down, they become more familiar.
They have more confidence in who they are dealing with, and
that is a part of it too, I think, if there is not that
confidence. Because, as you know, when OSHA started, people had
to get search warrants to come into factories in a lot of
places.
I don't know if you would like to comment on any of that,
Dr. Barab.
Mr. Barab. Yes. Let me just say, we, you know, we have, we
do have a lot of new inspectors coming in. We invest an
enormous amount of resources in training those inspectors. We
have a training institute outside of Chicago. We bring put them
in and we really put them through an almost 2-year course of
different classes and instruction before they go out on their
own, as it were.
So we really, again, try to focus on that consistency,
making sure our inspectors are experts and professional in
every way.
Mr. Petri. Well, my time is just about up, but you haven't
started putting in quotas again or they have got to find a
certain number of things, or they get promoted if they do or
they are called wimps if the don't, because that is what----
Mr. Barab. Not only don't we do that, we are actually
prohibited by law from doing that. We send our inspectors out
to, you know, to find problems. Sometimes they find problems,
sometimes they don't. But there is no kind of quota or anything
like that.
Chairman Walberg. I thank the gentleman for joining us
today as a member of the full committee. We appreciate you
taking interest in this.
At that, I will turn to my ranking member for closing
comments.
Ms. Woolsey. Thank you, Mr. Chairman.
Before I make my comments, I would like to point out that
the letter that Mr. Layne put into the record, it was Mr.
Layne--oh, Mr. Rokita placed in the record from the VPPPA,
appears to contradict a press release that we received in
October 2010. So I have that press release, and I would like to
enter it into the record.
Chairman Walberg. Without objection, so ordered.
[The press release follows:]

VPPPA Supports OSHA's Position on Incentive Programs

Falls Church, VA.--The Voluntary Protection Programs Participants'
Association, Inc. (VPPPA) supports the position of the Department of
Labor's Occupational Safety and Health Administration (OSHA) that
incentive programs must not encourage underreporting of injury and
illnesses. The question of the merit of incentive programs resurfaced
when OSHA, as part of its National Emphasis Program on Recordkeeping,
suggested that the existence of incentive programs may qualify for
deliberate under-reporting, raising a recordkeeping violation from
``other-than-serious'' to the willful level.
``We have found that incentive programs based primarily on injury
and illness numbers often have the effect of discouraging workers from
reporting an injury or illness,'' said OSHA Assistant Secretary Dr.
David Michaels at the opening of the 26th Annual National VPPPA
Conference in Orlando, Fla., in August. ``We cannot tolerate programs
that provide this kind of negative reinforcement and this type of
program would keep a company out of the VPP until the program or
practice is corrected.''
However, Voluntary Protection Programs (VPP) participants, just
like all other worksites, are free to use an incentive program as long
as it's the right kind of program, reinforcing positive behavior.
Specific questions during inspections and onsite evaluations have been
designed to determine whether some employers are under-reporting
injuries and how incentive programs affect the reporting of injuries
and illnesses.
``Incentive programs are a useful and common means to motivate
people and strive for improvement,'' said VPPPA Executive Director R.
Davis Layne. ``However, the association and its members disapprove of
programs that discourage employees from reporting injuries because they
want to receive a reward. Good incentive programs feature positive
reinforcement for demonstrating safe work practices and taking active
measures in hazard recognition, analysis and prevention.''
OSHA depends on VPPPA members and VPP participants in general to
ensure that the nation's workforce is safe and healthy on the job. VPP
sites have countless success stories of best practices in incentive
programs and are ready to support Secretary of Labor Hilda Solis'
vision of good jobs.
VPPPA, Inc., a nonprofit 501(c)(3) charitable organization, is
dedicated to promoting advances in worker safety and health excellence
through cooperation among communities, workers, industries and
governments. The nearly 2,100 VPPPA member sites primarily consist of
worksites that have been approved, or are seeking approval, into VPP as
administered by OSHA, state-plan OSHA and the Department of Energy.
______

Ms. Woolsey. All right. Thank you very much.
So, Mr. Chairman, thank you for holding today's hearing. As
Professor Levine has made very clear, inspections are effective
for reducing injuries and reducing workers' compensation costs,
so this is good for both the workers and the employers, and we
have to stop saying that it isn't.
Savings on workers' compensation is amazing when employers
realize what they get out of this. We also know that resources
for safety inspections are already limited. OSHA's budget
allows it to inspect each worksite every 131 years. I mean,
that is just appalling, but it does mean that to help fill the
resources gap, the resource gap, OSHA counts on workers because
they have to be the other set of eyes and ears.
But they can only do this and fill that role if there is an
effective whistleblower protection for them, because, today,
OSHA faces a massive backlog of over 2,000 whistleblower
complaints, and they have to be investigated in addition to the
new cases that have to be dealt with every day.
So we have to put that forward. If we are not going to hire
lots and lots of inspectors, we should be able to trust the
workers, and they have to go have a whistleblower committee, I
mean, an agency, where they can safely bring their complaints
or their concerns.
So, Mr. Chairman, thank you. We have so much to do, this
has been good. I mean, I am telling you, Mr. Lee, every company
in this country should be like yours, and then we don't even
need OSHA, but we do need OSHA because somebody has got to
investigate.
Chairman Walberg. May I quote the first statement?
Ms. Woolsey. Yes, but, no, not the second half of it. You
have to do the whole thing, Mr. Chairman. You are fair, I know
you will.
So, but we do need--I mean OSHA is so important to us
because they fill in all the gaps and employers really can't do
on their own, but now thank you for being an example of how VPP
can work and thank you, Jordan, for doing all that you do.
Thank you, and thank you, Mr. Chairman.
Chairman Walberg. I thank the gentlelady, and I want to
thank all the witnesses for being here. I wish that America
wasn't in a situation where we had to hang on the words of nine
people today waiting for an answer. A lot of other things kind
of went by the wayside, but we appreciate the willingness of
people to move up the time period to start this at 9:30, as
opposed to our identified time originally, because I think this
information was necessary to hear.
There is no disagreement, I think, by either side of this
dais that we want safe workplaces. Safe workplaces are
productive workplaces. Productive workplaces make money, and in
our society that is a necessity to continue on the leadership
in the world that we have, to have jobs that people can be
accountable to, as well as responsible for, and succeed in and
ultimately be able to do for themselves what they can and
should do as well in this country to care for others, and they
genuinely need help around the world as well as in our United
States.
That all goes together, and a safe workplace helps to do
that. But we also know a safe workplace must be a workplace
that continues a second day, third day, fourth day, fifth day,
that provides jobs in a consistent framework where people can
count on it, unlike some of our policies sadly here in
government at times, and we can continue to try to work that
out.
There is a place for OSHA, and I don't say that jokingly at
all. I believe there is a place for OSHA, and I believe there
is a place for----
Ms. Woolsey. May I put that in the record?
Chairman Walberg. You can put that on the record. It is on
the record.
There is a place for State OSHAs as well, as in Michigan,
and we know that it works in many cases very well. We know
there are horror stories also. Humans come with horror stories.
We just want to make sure that we have settings that work
better as a result of ownership that comes from partnership. I
think that is what I have been pushing for as chairman of the
subcommittee that we see more partnerships develop in a
proactive way, as opposed to regulation by shaming or, on the
other side of the ledger, trying to get under the radar and do
things that are not productive or good.
So if we can come to the middle and devote ourselves to
partnerships where we have businesses that have best practices
that they can develop--and I think that is one of the things I
hear from the VPP programs--is that best practices are
promoted. When we talk about whistleblowers, what better
whistleblower is there than a Mr. Henson, who has complete
authorization within his corporation as an employee to sing out
loud and proud when there is a problem, but also sing out loud
and proud when there is something that works for all concerned
and makes the product better, makes the outcome better but also
makes sure there is safety in the workplace.
That says to me that the design of this country, that said
the best way we can police ourselves is by policing the
ourselves, and being people who understand true morality,
understand responsibility and understand accountability, that
we work together as opposed to hiding things or working in
competition with each other.
So I appreciate this hearing today, and I appreciate the
lengths to which you came to provide not only insights,
personal testimonies, but the facts of the situation from a
broad perspective.
I appreciate research, and I appreciate those that are
objects of research that promote it from the real life, living,
practicing world.
Ms. Woolsey. Mr. Chairman, I have one more thing to ask be
included in the record. It is the OSHA whistleblower
investigation data dated June of 2012 that shows the average
days pending for whistleblower cases, 359 days. I am sorry, I
should have done that when I was talking about it, and I missed
that.
Chairman Walberg. Without objection, so ordered.
[The data follows:]

OSHA WHISTLEBLOWER PROTECTION PROGRAM
[Investigation data 10/1/11-6/15/12]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average % Pending
Cases Cases Cases % Timely days to Pending cases over Average days
received completed completed complete cases age pending
--------------------------------------------------------------------------------------------------------------------------------------------------------
ACA....................................................... 11 11 55 127 6 83 183
AHERA..................................................... 3 1 0 70 6 83 343
AIR21..................................................... 37 41 20 381 86 87 535
CFPA...................................................... 5 6 50 68 2 50 83
CPSIA..................................................... 4 3 33 411 3 67 162
EPA....................................................... 36 32 34 284 45 78 396
ERA....................................................... 35 38 8 426 53 79 365
FRSA...................................................... 234 191 22 331 413 87 375
FSMA...................................................... 11 9 22 168 15 73 218
ISCA...................................................... 0 0 0 0 0 0 0
NTSSA..................................................... 11 7 14 319 21 81 457
OSHA...................................................... 1153 1079 27 248 1431 80 340
PSIA...................................................... 1 1 0 248 6 83 398
SOX....................................................... 108 108 31 352 153 81 402
SPA....................................................... 7 7 43 134 5 80 336
STAA...................................................... 216 205 29 284 280 84 354
---------------------------------------------------------------------------------------------
Totals.................................................. 1,872 1,739 26 273 2,525 82 359
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: This report contains sensitive information that may not be appropriate for distribution outside OSHA. Local office should review the information
BEFORE it is provided to outside requestor.

______

Chairman Walberg. Having said that, again, thank you for
being here. There is no further business to come before the
committee, and so this committee stands adjourned.
[The statement of Mr. Petri follows:]

Prepared Statement of Hon. Thomas E. Petri, a Representative in
Congress From the State of Wisconsin

Thank you, Mr. Chairman, for allowing me to sit in on this very
important hearing. I meet with companies from my district all the time,
both large and small, and I hear a very common theme with respect to
OSHA. Many are very frustrated by the agency's approach to its
relationship with business--they feel as if there is a kind of
``GOTCHA'' attitude instead of one that seeks to help them to be in
compliance with the law. Oftentimes, they say, inspectors seem to look
for mere paperwork violations instead of actual threats to worker
safety.
While enforcement of our worker safety laws is important, I think
the Voluntary Protection Program (VPP) provides an opportunity for the
agency to work with companies that demonstrate a willingness to put in
place--in cooperation with their workforce--a comprehensive worker
safety and health system--and hopefully to encourage others to do the
same. That is why I introduced H.R. 1511 along with Representative Gene
Green from Texas.
I thank you again, Mr. Chairman, for holding this important
hearing.
______

[Additional submission of Mr. Walberg follows:]

June 28, 2012.
Hon. Tim Walberg, Chairman; Hon. Lynn Woolsey, Ranking Member,
Subcommittee on Workforce Protections, Committee on Education and the
Workforce, U.S. House of Representatives, Washington, DC 20515.
Dear Chairman Walberg and Ranking Member Woolsey: On behalf of
Associated Builders and Contractors (ABC), a national association with
74 chapters representing more than 22,000 merit shop construction and
construction-related firms, I am writing in regard to the subcommittee
hearing titled, ``Promoting Safe Workplaces Through Voluntary
Protection Programs.''
As builders of our country's communities and infrastructure, ABC
knows that a premium must be placed on jobsite safety. Safe workplaces
are essential to the success of our businesses, and we take seriously
our moral obligation to provide employees with safe and healthy
environments in which to work. Thousands of ABC companies have
implemented safety programs that are among the best in the industry,
often far exceeding OSHA requirements.
ABC members have grown increasingly concerned with OSHA's emphasis
on, and promotion of, its aggressive enforcement agenda. The agency has
increased fines and penalties across the board and continues to
publicly shame employers before enforcement decisions are made final.
To make things worse, the agency is engaging in these activities while
simultaneously deemphasizing positive engagement with employers and
cooperative tools like the Voluntary Protection Program (VPP).
OSHA's fiscal year 2013 budget calls for significant cuts to the
agency's federal compliance assistance programs, including VPP. Indeed,
the program has already seen funding and staff reductions, which in
turn have slowed the application process and limited the number of new
program participants. ABC strongly believes that resources dedicated to
VPP and other cooperative programs should not be diminished.
During the 112th Congress, ABC has supported the Voluntary
Protection Program Act (H.R. 1511), introduced by Rep. Tom Petri (R-
Wis.), which would codify VPP, expand it to include more small
businesses and incorporate recent recommendations for program
improvements. ABC strongly believes that the road to zero-incident
jobsites starts with a cooperative effort from both OSHA and employers
to understand the rules in place to maintain a safe workplace, and to
develop the methods to achieve them. We urge the subcommittee to take
up this much-needed legislation.
We appreciate your attention to this important matter and look
forward to working with the subcommittee to ensure that OSHA reaffirms
its dedication to working with employers and viewing them as partners
in achieving safer workplaces.
Sincerely,
Kristen A. Swearingen,
Senior Director, Legislative Affairs.
______

[Questions submitted for the record and their responses
follow:]

U.S. Congress,
Washington, DC, July 12, 2012.
Jordan Barab, Deputy Assistant Secretary of Labor,
Occupational Safety and Health Administration, U.S. Department of
Labor, 200 Constitution Avenue, NW, Washington, DC 20210.
Dear Mr. Barab: Thank you for testifying at the Subcommittee on
Workforce Protection's hearing on ``Promoting Safe Workplaces Through
Voluntary Protection Programs,'' held on June 28. I appreciate your
participation.
Enclosed are additional questions for the record submitted
following the hearing. Please provide written responses no later than
July 26 for inclusion in the official hearing record. Responses should
be sent to Ryan Kearney of the Committee staff who may be contacted at
(202) 225-4527.
Thank you again for your contribution to the work of the Committee.
Sincerely,
Tim Walberg,
Chairman
question from representative woolsey
1. To be recognized under the Voluntary Protection Program,
employers must put in place effective ``safety management systems.''
This requires a program to regularly identify workplace hazards and fix
them. Isn't this exactly the same approach to safety that OSHA is
pursuing with its ``Injury and Illness Prevention Program'' rule that
is now under development?
______

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U.S. Congress,
Washington, DC, July 12, 2012.
R. Davis Layne, Executive Director,
Voluntary Protection Programs Participants' Association, 7600-E
Leesburg Pike, Suite 100, Falls Church, VA 22043.
Dear Mr. Layne: Thank you for testifying at the Subcommittee on
Workforce Protection's hearing on ``Promoting Safe Workplaces Through
Voluntary Protection Programs'' held on June 28. I appreciate your
participation.
Enclosed are additional questions for the record submitted
following the hearing. Please provide written responses no later than
July 26 for inclusion in the official hearing record. Responses should
be sent to Ryan Kearney of the Committee staff who may be contacted at
(202) 225-4527.
Thank you again for your contribution to the work of the Committee.
Sincerely,
Tim Walberg,
Chairman
questions from representative woolsey
1. Of the 2374 sites recognized through the federal and state OSHA
Voluntary Protection Programs, how many of these VPP-approved sites are
also members of the Voluntary Protection Program Participants
Association?
2. Is Pactiv Corporation a member of the VPPPA?
______

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[Whereupon, at 10:43 a.m., the subcommittee was adjourned.]