New Zealand's Health & Safety Amendment Bill - Leading the Way

Risk! Engineers Talk Governance Podcast
Season 7, Episode 4

In this episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis discuss New Zealand's Health and Safety at Work Amendment Bill and explore why New Zealand is leading the in workplace health and safety.

They break down the key changes in the amendment, including a sharper focus on critical risk and what this means for both large organisations and small PCBUs. 

The conversation touches on the real-world prosecutions that appear to have motivated the reform, including the White Island volcanic eruption and the conviction of the former CEO of the Port of Auckland.

Richard and Gaye also reflect on how many organisations are getting too consumed by lower-level compliance activity while the critical risks get deprioritised or ignored entirely.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers, Richard Robinson and Gaye Francis discuss the latest amendments to the New Zealand Health and Safety Act and how they're leading the way.

(00:16):

We hope you enjoyed the chat. If you do, please support our work by giving us a rating and subscribing on your favorite podcast platform. And if you'd like more information on R2A, our newsletter and resources, or have any feedback or topic ideas, head to the website www.r2a.com.au.

Gaye Francis (00:36):

Hi Richard. Welcome to our podcast session.

Richard Robinson (00:38):

Good morning, Gaye. Good to be back.

Gaye Francis (00:40):

It is good to be back. It's been a crazy couple of weeks.

Richard Robinson (00:44):

I keep reading that as you get older, you're meant to get happier.

Gaye Francis (00:48):

Okay.

Richard Robinson (00:49):

I'm supposed to be ecstatic at my stage of life.

Gaye Francis (00:51):

I was going to make that joke. I thought I'd better not. <laughs>

(00:55):

Today's topic, we're going to talk about the Health and Safety at Work Amendment Bill out of New Zealand and some interesting developments that it's recommending and looking like implementing, but they're really leading the way in this health and safety space at the moment. So I think, as you always do, can you give us a brief summary of what the amendment bill looks like? And then we'll discuss maybe some of the implications of it.

Richard Robinson (01:24):

I better just explain the reason why we came across this because we're doing some work in New Zealand and we're briefing relevant legal counsel. And so we're just sort of checking what the status of various things were because we're fairly familiar with it all. Having done quite a lot of work in different places in New Zealand. But we came across this and we found this particularly interesting because we had noticed the Kiwis have been particularly active in prosecuting people and successfully prosecuting them. In particular, you might recall the volcanic eruption.

Gaye Francis (01:51):

White Island.

Richard Robinson (01:52):

23 people got killed. In the end, seven companies got convicted.

Gaye Francis (01:56):

Correct. The individuals walked away, but the companies were convicted.

Richard Robinson (02:00):

But the one that sort of motivated everybody was in 2024, the former CEO of the Port of Auckland got convicted for a heavy lift crane dropped something on someone and killed someone. And their former CEO got convicted. And that was despite the fact that that CEO, from all the readings I'd done, was actually pretty strong on safety and tried to get a lot of things done. Now, we're not entirely sure. I'm sort of though we're listening to the NZ Parliament to work out why they've decided to introduce this amendment. But what we thought we'd do is go through what we understood to be the key bits of it. It's obviously available online, although it does note that, and we printed this off about a week or so ago (early March 2026), and it does say it will be replaced in March. So I guess this thing's ongoing fairly fast.

(02:44):

But basically it does a number of things. The overall objective, as they sort of point out, is to make the thing more efficient because I think what they've noticed is there've been a lot of wheel spinning and an awful lot of people spending an awful lot of time on lesser matters that they shouldn't be doing. And so when you're sort of looking at the summary of this thing.

(03:01):

Now there's a clarification of regulators as the first point. It's their CAA, Civil Aviation Authority, and who we've had a bit of dealing with.

Gaye Francis (03:08):

Yes, we have.

Richard Robinson (03:09):

And their maritime regulator, whom we've had a little bit of dealing with. Their roles are more precisely defined.

Gaye Francis (03:15):

Ok.

Richard Robinson (03:16):

And much crisper. But then the next and most important thing is they say is focus on critical risk, which is something we've hammered.

Gaye Francis (03:23):

For a very long time.

Richard Robinson (03:24):

Very long time. And they define critical risk. I mean, there's a whole lot of definitions at the back about amusement rides and things like that and crane movements in particular, which presumably...

Gaye Francis (03:35):

Will be an output from the Auckland incident.

Richard Robinson (03:37):

I did notice that WorkSafe Australia has just got a call for action on-

Gaye Francis (03:42):

Crane movements.

Richard Robinson (03:43):

At ports.

Gaye Francis (03:43):

Right.

Richard Robinson (03:44):

So it's a popular subject. But the other definition of critical risk is basically, I mean, they've got better words to cover it, but it's kill or maim. If it can lead to a death, then you're meant to have it under control. That sort of led onto a little supplementary point is that they also then say that they define a small PCBU and a small PCBU is 20 people or less.

Gaye Francis (04:11):

Right.

Richard Robinson (04:11):

Small PCBUs only have to focus on the critical ones.

Gaye Francis (04:15):

Okay. So any issues that can kill a maim, the small PCBU has to just do that. For larger organisations, they have to prioritise the critical ones, but still have processes, governance processes in place to manage the other.

Richard Robinson (04:29):

Yes, but it's not an offense to failure to prioritise because presumably you're going to still do them all.

Gaye Francis (04:34):

Yes.

Richard Robinson (04:35):

Although our frustration is that people get lost in the detail and after a while, just ignore the big rare one, which is the one they really want you to focus on.

Gaye Francis (04:43):

And I think the question still comes up, especially in the consulting work that we do. It's really that question of credibility. When something is so rare, we often get the pushback of, do we really have to worry about this because it's so rare that it's not going to happen. So that likelihood argument still creeps in even when they're determining critical.

Richard Robinson (05:08):

Oh, well, this amendment's quite clear, if it can kill or maim and it's possible, then you've got to do something about it as far as I can tell. It does say that they clarify overlaps with the legislation, which wasn't totally clear to me. What they're saying is that the Work Health and Safety Act is not meant to be a backstop to public health.

Gaye Francis (05:32):

Okay.

Richard Robinson (05:33):

But that doesn't mean ... I mean, for example, one of the examples they sort of give is if in order to get to a recreational area, somebody has to walk over private land like farmland or something like that. The mere factor walking over the farmland doesn't create a liability for the farmer. But obviously if the farmer runs the poor character over with a tractor, that's the consequence of work. So you still have to consider those sorts of things. So they're being very clear about what you're trying to do there.

(05:57):

The other thing they do is they clarify the duty of a director. In our work health and safety legislation, it says, demonstrated due diligence includes these six points." Remember, between the penultimate and the final they changed one word. Although all the lawyers keep telling us, if it's not in the Act, then including something else would be hard to do, but we're not lawyers, so you can check that one. But when they define it, they actually then define it and I'll sort of go (through).

Gaye Francis (06:28):

This is in the (NZ) amendment bill.

Richard Robinson (06:30):

This is in the amendment bill.

Gaye Francis (06:31):

Yes.

Richard Robinson (06:31):

They basically say that ... Well, there's two parts. The first part was that I'm not quite sure why they thought necessary to do this, but if you had a duty as a worker and an officer, your duty of an officer took precedence.

Gaye Francis (06:44):

That seems logical.

Richard Robinson (06:46):

One would've thought so, but I guess if it's not clearly stated...

Gaye Francis (06:49):

It can be argued.

Richard Robinson (06:51):

And then in the section on due diligence, they now say due diligence means taking reasonable steps to understand the nature and operations of the PCBU, the hazard and risk associated with operations and work health and safety matters as it generally applies to that business. And then in terms of controlling these things to ensure that the PCBU has available to use and uses appropriate resources and processes, has appropriate process for receiving considering information, has and implements process for complying with any duty and part C is your favourite observation to verify the provision of these resources and processes.

Gaye Francis (07:28):

I think that's a really interesting one because we often get asked the question about doing these things and what controls go in place, but then what's the quality assurance around it to make sure what you say you're going to do, (a), is actually done, but also is maintained to a level that ensures that effectiveness of that control. And I think when we talk to boards and things like that, they sort of, "Oh, it's done and dusted," and you move on to the next thing because they've got a long list of things to do, but they've got to keep asking the question, "Are all of these things remaining in place?" And that comes down to that governance process that you've got. And all of these things are interlinked. And they're still being done in silos, I feel, in organisations.

Richard Robinson (08:17):

I think you're right. And it always fascinates us. You see a lot of risk registers and a failed control is a line in a risk register rather the quality thing. Although I do think, I mean, this is the case, and I suspect that's why it's in the Act. If you've got a control and somebody's dead because the control failed, all hell breaks loose.

Gaye Francis (08:36):

It has to.

Richard Robinson (08:37):

And that's why I think they're specifically listed in the legislation. What they tend to do is put in things, something bad happens, and then what they tend to do is put in what they felt ought to have been in place to make sure that they ought not to have happened.

Gaye Francis (08:51):

Yeah, right.

Richard Robinson (08:51):

But that's why it's a sort of moral philosophy thing. And it's a bit strange because you're trying to make a moral imperative. I mean, I think when you talk to anybody about it, it's self evident. The failed control's got to ... Somebody's got to suffer.

Gaye Francis (09:06):

But I think there's two interesting parts to that because when we go and talk to boards sometimes, it's sort of like, are they getting the right information about the critical issues? And then I think the second step is what are the critical controls in place to manage those issues and what's your quality assurance process and procedure around that to ensure that they're being sustained? So even though the board might not have a detailed understanding of those, they have to have the tools and be able to ask the questions to make sure that that happens. So it's that verification step of both the critical issues, the controls, and what makes us confident that they're being sustained and implemented properly.

Richard Robinson (09:49):

Yep. The last thing of significance, I think from the point of view if anybody's interested in these things, is really strengthening approved codes of practice. And they're basically saying that certain approved codes of practice, if you have implemented that code of practice, you have demonstrated due diligence.

Gaye Francis (10:06):

So that's for critical risks as well?

Richard Robinson (10:08):

Yeah. Well, I think the argument was, I mean, they've got a couple of examples here, but they're looking at obviously creating more of these approved ones to try and ... It's particularly for the smaller PCBUs. I can see how it's very, very hard for a small PCBU.

Gaye Francis (10:24):

To start from scratch. Absolutely. We've talked about the roles of standards and codes of practice and things like that. They're still lagging indicators. And in a world where technology is changing so fast, I think that could also be a little bit ... tricky.

Richard Robinson (10:42):

I think it's going to be a few test cases before they resolve that one, because if an approved code of practice has an obvious control or misses an obvious control that ought to been in place, for the life of me can't see, because the legislation still takes priorities. But again, if the legislation says-

Gaye Francis (10:57):

You rely on that code. I better guess this is our go back line, isn't it? You'd have to check that one with your lawyers.

Richard Robinson (11:04):

Every time.

Gaye Francis (11:06):

But we would probably just caution that as a black and white rule because codes of practice and standards are lagging indicators and often don't have the latest up-to-date thinking of what potential controls could be.

Richard Robinson (11:24):

That's correct. And the technology, the way the technology is changing out here...

Gaye Francis (11:28):

So fast.

Richard Robinson (11:29):

I mean, we're getting completely frustrated with Apple and Microsoft. This business is becoming an appendage to an AI in some form rather than having our own computing platform. It's just driving us crackers, but that's a common problem for everyone.

Gaye Francis (11:43):

So the New Zealanders really appear to be leading the way in this particular area.

Richard Robinson (11:49):

And we were reflecting on why might that be the case.

(11:52):

And you see, the Kiwis are a little different because they've got their Acts & Compensation commission, which is no fault. And that means something bad happens, then they've tried to patch the place up without blaming somebody particularly for it. Whereas we in Australia have always been pretty keen on common law actions, right? Now, our WHS legislation is basically a statutory statement of the common law duty of care. And obviously, I assume that if you're politicians and things like that or parliamentarian, you've seen a lot of people get hurt, and the common law didn't seem to be sufficient. You then elevate that to statute law to try and make those provisions or that philosophical and ethical understanding-

Gaye Francis (12:29):

More robust, I guess.

Richard Robinson (12:31):

Now, the Kiwis attended all their workplace relation ministers council and kept an eye on what we Australians are up to, left it for a couple of years, but then implemented their legislation in 2015. And I've got a funny suspicion, but having implemented it, some bad things happened and immediately started prosecuting.

Gaye Francis (12:48):

Successfully prosecuting as well.

Richard Robinson (12:51):

Successful prosecuting and convicting people. And they looked at that and said, hmm, we weren't expecting that robust a result. I mean, I think that's saying that if an Act exists and a prosecutor says, well, as far as I can tell, if I prosecute and I have a successful prosecution, I believe that's the duty of the prosecutor, the public prosecutor in those circumstances. So if it's a parliament you're not happy with that, then you've got to sort of tweak the Act to make it more precise so that you only prosecute the ones you want to prosecute, you don't prosecute people, which in a way that isn't helpful to society as a whole, because they're trying to stop that.

Gaye Francis (13:27):

The one they have been successful in is the White Island, I mean, they have been kill or maim incidents.

Richard Robinson (13:32):

Oh, that's certainly the case, but they're trying to work out, they sort of backed off from prosecuting individuals, but they still prosecuted the businesses.

Gaye Francis (13:40):

Organisations. I think it's also, there's probably been industry complaints or frustrations, I guess, that so much effort is put into the WHS space, work health and safety space, and you often don't see the results of it. You're putting all of this effort in...

Richard Robinson (14:01):

It's not being efficient.

Gaye Francis (14:04):

It's not being efficient. And you're right, you're getting lost in the detail and spinning the wheels for things that don't necessarily give you the biggest bang for buck.

Richard Robinson (14:13):

Bureaucratic administrative structures that are causing mayhem for the people to actually get on and do things.

Gaye Francis (14:17):

So this sort of one gives the tool. Well, it gives two things, I think. It gives people a tool to get on with the job, but it also gives those credible, critical issues that are often discounted by the likelihood so much that no one ever gets on with it. Even by, they don't even get to the stage of looking at what controls should be put in place.

Richard Robinson (14:38):

It gets too hard.

Gaye Francis (14:39):

It gets put in the too hard basket. And I think the little bit that we've read on the Auckland CEO was, yes, he was doing things around health and safety and hadn't quite got to this particular issue, although he knew about it.

Richard Robinson (14:54):

He knew about it, but I don't think he'd got on with it fast enough.

Gaye Francis (14:57):

So often, and that's what I was sort of trying to say. Some of these lesser things are taking so much time and spinning the wheels so much that you don't get onto those things that need to be prioritised and focused on, even though their potential, well, they could be rare.

Richard Robinson (15:13):

Yeah, that's right. But I think the other thing that's sort of puzzling me a little bit, I mean, they're trying to clarify and regulators and things like that, but in the end, the point is that stop bad things happening, and in the end, the duty is to demonstrate SFAIRP, that hasn't changed.

Gaye Francis (15:27):

Yes.

Richard Robinson (15:27):

And the question of who's going to prosecute whom after the event and in what court and what jurisdiction. At one level it doesn't matter. It's all about control. It's not about ownership.

Gaye Francis (15:36):

And controlling before the fact.

Richard Robinson (15:38):

Correct. And I think that's why there's some other confusions going on still around the place, which regrettably, I suspect it will take a court case to determine.

Gaye Francis (15:46):

Yeah. So interesting space at the moment in New Zealand. It'll be interesting to see if Australia goes down that path as well.

Richard Robinson (15:54):

Well, the way it seems to work, the four big jurisdictions have to get together and the lesser jurisdictions will follow along, but that's a complicated process.

Gaye Francis (16:02):

It is. It is and not one to solve today.

Richard Robinson (16:04):

No.

Gaye Francis (16:04):

So thanks for joining us today, Richard, and we'll see you next time.

Richard Robinson (16:08):

Thanks, Gaye.

Psychosocial Hazards in the Workplace Regulations

Risk! Engineers Talk Governance Podcast
Special Episode

In this special episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis discuss psychosocial hazards in the workplace and the newly introduced Victorian Occupational Health and Safety (Psychosocial Health) Regulations 2025, which came into effect on 1 December 2025.

They explain that the new regulations largely re-states existing Occupational Health and Safety legislation requirements to identify, eliminate, and reduce such hazards as far as reasonably practicable. They also note that psychosocial hazards can manifest in various ways, such as aggression, bullying, exposure to traumatic events, and high-demand jobs. However, they argue that many of the hazards listed in the regulations are failed controls. 

They recommend that organisations break down psychosocial issues into specific mechanisms, such as vicarious trauma, workload stress, and occupational violence, and then develop targeted controls to address those mechanisms, and highlight how high-risk industries, such as marine pilotage and emergency services, that have long-standing practices for managing psychosocial risks.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this special episode, due diligence engineers Richard Robinson and Gaye Francis discuss psychosocial hazards in the workplace and the new Occupational Health and Safety (Psychological Health) Regulations 2025 introduced in Victoria on the 1 December.

(00:23):

We hope you enjoy the chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

Gaye Francis (00:40):

Hi Richard, welcome to a special podcast session today.

Richard Robinson (00:43):

Indeed, Gaye.

Gaye Francis (00:45):

What we're going to do, we're going to talk about psychosocial issues and the reason for that is the timely release (today), the 1st of December, and the Victorian Occupational Health and Safety Regulation around psychosocial issues has come out and takes effect as of today. And in our consulting work, we seem to be being asked a lot more questions.

Richard Robinson (01:10):

The last couple of courses we've done for different people, psychosocial stress has popped up as a significant component, people asking what we knew about it, basically.

Gaye Francis (01:17):

That's right. And I guess as a bit of a disclaimer, Richard and I are both engineers. We certainly don't work in specifically in the psychosocial space, so apologise in advance if we use some incorrect terminology. It's not intentional at all and there's nothing behind it. So I guess that's just a disclaimer from our viewpoint.

(01:40):

But in the work that we see and the work that we've done around psychosocial issues, it's been one of many issues that we've considered for organisations. It hasn't been the only issue. And I think what we've seen is the rise of this has seen it as the key issue that organisations have to deal with. I don't think I necessarily agree with that. I think there's still some pretty serious physical issues and hazards that need to be dealt with. But what we thought we'd do is just go through the Regulation and then a little bit on what we think and how you can break it down and deal with how you can identify and control some of these psychosocial issues.

Richard Robinson (02:23):

Yeah, I was just reading the Regulations and at one level I find this a bit odd because all they're really doing is re-stating what the legislation already says.

Gaye Francis (02:32):

Which is Occupational Health and Safety Legislation.

Richard Robinson (02:33):

Occupational psychosocial stress had always been an aspect of that.

Gaye Francis (02:36):

Correct.

Richard Robinson (02:37):

For some reason it seems to peculiarly have its own regulations. But I mean just from a very practical point of view, once you get into the thing in detail, it actually does summarise the SFAIRP (So Far As Is Reasonably Practicable) proficiency of the WHS legislation. And from our point of view it's a bit strange. I mean, as we've said, we've done some consulting work for this sort of thing, but it's always been one hazard amongst many. And the way you sort of talked about the breakup and the way we went around it, it's probably worth explaining. I suppose just from my point of view, we find the regulation a bit confusing.

Gaye Francis (03:10):

Just before you go there. So when Richard says that it's really the same as the Occupational Health and Safety legislation that is you have to eliminate psychosocial hazards or issues so far as is reasonably practicable.

Richard Robinson (03:23):

Well, you've got to identify them first.

Gaye Francis (03:24):

Identify them first and then eliminate them so far as is reasonably practicable. If you can't eliminate them, they have to be reduced so far as reasonably practicable. Which is the same obligation as the OHS and WHS legislation.

Richard Robinson (03:36):

Yeah, and this regulation just re-states that at a number of number levels you've got to consult widely and all the rest of it and how you go about it. But the issue has not changed. And I suppose what I find a bit odd, just for example, they talk about what a psychsocial hazard means and that the fact it can be created in various ways, then it gives some examples. And we find that it's got the same confusions we come across in lots of places and lots of risk registers.

(04:00):

It's got aggressional violence, bullying, exposure to traumatic events or content, high demand jobs. Then it starts talking about controls and in effect what they're talking about is failed controls: low job control, low job demands, low recognition reward, low role clarity, poor environmental conditions, poor, poor organisational change management and poor organisational justice, poor support, poor workplace relationships, remote or isolated work, and sexual harassment. But a lot of those are actually failed controls. If you are trying to make sure certain things are done, manage aggression or violence, well then you actually have to have ways of identifying where that might occur, to whom it might occur, what controls you can put in place.

Gaye Francis (04:39):

And then you quality assurance system.

Richard Robinson (04:40):

Some of these ones are these things, the fact that you leave somebody out in the sticks where they can be attacked and you don't have any way of following up with them or consulting with them or having controls to assist them, I just find that a bit strange.

Gaye Francis (04:55):

So I guess that leads on to the work that we have done in this space and it's around if you just have a catch-all for psychosocial issues, we've seen that not work very well because you need to actually break it down to the mechanisms that we're talking about. And the key ones that we've seen is that vicarious trauma - the content of a particular job, workload stresses, third partner threatening scenarios, sexual harassment, bullying, negative behavior, all of those sort of things, and then occupational violence within the workplace. And if you can break it down into those, the controls really then match into those different mechanisms.

Richard Robinson (05:34):

That's your duty under the OHS Act because the idea, I mean you're going to try to eliminate and that's your objective.

Gaye Francis (05:41):

Absolutely.

Richard Robinson (05:42):

And we've sort of talked about that before with, it's like saying the police commissioner's objective is to eliminate child molestation in the city. And we say, yeah, we agree with your objective. Is it going to happen? Probably not. But what you want to do is to demonstrate you've done every reasonable practical thing you can to manage it. And that's the due diligence part. So you're not saying you're going to prevent it totally, but you're going to make sure that obviously egregious failures are going to be prevented.

Gaye Francis (06:08):

And you've got mechanisms in place to, as you said, identify them. Follow our why model again: What are all the credible critical issues? What are the controls that you could put in place to do it? What are reasonable in the circumstances? And then as you said, the quality assurance system to follow up to make sure those controls that you have agreed to are sustained.

Richard Robinson (06:27):

And the Act already says you've got to consult widely and give people the opportunity to express their concerns in a constructive and useful manner. There's nothing new or novel in that. That's why when you read this, obviously it's been done so that people can have a more focused target or something. But it doesn't actually change anything. It says identification of psychosocial; you must so far as is reasonably practicable identify psychosocial hazards. You must so far as is reasonably practicable eliminate any risk. And if you can't eliminate, you must so far as reasonably practical reduce.

Gaye Francis (07:04):

I think we just add one more thing. There's also a little bit of confusion around mental health issues associated with it, and I'm not sure that psychosocial issues and mental health are one and the same. I think that it is an aspect that can contribute to psychosocial issues and how that plays in and that may affect the types of controls that you put in place, for example, or some of the pre-employment checks that get done. The other example that we had up in the discussion that we've had in the last week around psychosocial issues has been with the marine pilots and them able to be -- one of the psychosocial issues is they've got the pressures of bringing large ships in on environmental conditions and weather conditions that may not be...

Richard Robinson (07:53):

With strange ship crews that they don't know.

Gaye Francis (07:55):

So there's all of those pressures that come in, but then there's also the pressure of getting the ship in and getting it unloaded for the efficiency of the port as well. So all of those things come in and we were sort of talking that through and they were saying that some of the things that they've started to do, which I think are really interesting, are pre-employment psychological checks and tests.

Richard Robinson (08:19):

That you're capable working in a high stress situation, and you won't go into a panic and freeze or do various things.

Gaye Francis (08:25):

You've got a very, very big ship under your control. And the other thing that they were talking about was some peer support network that they're trying to set up that you actually don't talk to somebody that's not in the industry. You've talked to somebody who does the job, and what would you do? So it's sort of taking the decision away, I guess, from you making the decision by yourself.

Richard Robinson (08:47):

Well you're sharing responsibility, but the marine pilots have always done that and the air pilots do it and the surgeons do it. I would not have thought this was new or novel. I think that's what's got me bit puzzled.

Gaye Francis (08:59):

I think because it's been expanded out to a wider industry, but there is some really good (examples), the emergency services deal with all of this sort of stuff on a regular basis. So I think there's some things that we can learn and certainly not reinventing the wheel here.

Richard Robinson (09:14):

Well, that's what this regulation suggests, that the wheel needs reinventing.

Gaye Francis (09:17):

Correct. And I dunno that it does.

Richard Robinson (09:19):

I don't know that's what this (regulation does). There's nothing particularly new and novel in here that I can detect. And it is very frustrating. I like the examples I just gave where they're confusing fail controls with hazards in themselves.

Gaye Francis (09:31):

Then the mechanisms are different mechanisms that relate.

Richard Robinson (09:33):

That's just very difficult.

Gaye Francis (09:34):

So our advice would be that everyone needs to consider psychosocial and you always have, it's always been part of OHS ACt. It's not new or novel. But go to a level of detail that you pull out what the actual mechanisms are and then the controls that you can put in place to affect those mechanisms or deal with those mechanisms.

Richard Robinson (09:55):

But safety due diligence, again, which our OHS Act in Victoria does not call up in itself, but it obviously is the fact that you've identified the issue and you've demonstrated all reasonable practical controls are in place. And if you've done those things, the question then is: What else can you do? Which is what the legislation is testing you for.

Gaye Francis (10:13):

And as I would always say to our clients, document why you're not going to do something that's just as important to document why you are going to do something. So thanks for joining us today, Richard, on our special podcast session and we hope you listen next time. Thanks everyone.

Richard Robinson (10:28):

Thanks everyone.

Major IT Outage - Criticality & Resilience

Risk! Engineers Talk Governance
Special Episode

In this special episode, Richard Robinson and Gaye Francis discuss the recent IT outage (July 2024) that affected systems worldwide and the importance of criticality and resilience. 

Main take-aways include:

• The outage was predictable and foreseeable. It was a critical incident.

• You can't gold plate a single system so that it won't fail. 

• The importance of redundancy – ensuring you've got another independent system that doesn't rely on the primary system.

• Engineering organisations are required to look at the credible worst case scenarios that can happen and what you can do and put in place to make sure that they're managed

• You need to positively demonstrate due diligence about what you're doing. And due diligence means that you take into account the credible critical issues. 

• When doing these reviews, you have to talk with the senior decision makers, who understand the business’ critical requirements.

The book referred to is Due Diligence Engineering and can be purchased online.

Access the episode’s full transcript below.

Episode transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. Following Friday's, major IT outage that affected systems around the world, we thought we'd bring you this special episode with due diligence engineers, Richard Robinson and Gaye Francis, discussing the importance of criticality and resilience.

(00:20):

If you enjoy the episode and our podcast help spread our work by sharing, rating and subscribing. And watch out for season four, which will be coming soon. Enjoy the episode.

Gaye Francis (00:32):

Hi Richard. Welcome to a special podcast session today.

Richard Robinson (00:36):

Yeah, it's quite remarkable we're actually here (in Melbourne) because we were in the air when that recent IT debacle occurred.

Gaye Francis (00:41):

We were. So we thought we'd do a podcast on the recent IT failure that affected so many systems in Australia and around the world and just the way that it relates to criticality and resilience.

Richard Robinson (00:58):

Yeah, and basically this is something we talk about all the time and our book (Due Diligence Engineers, R2A text) actually speaks about it at some length and we understand the professor of engineering at RMIT was basically going through it again, because people were asking if it was just an accident and we were sort of going; not really, it was predictable and should have been managed and they should have and could have done more than they did.

Gaye Francis (01:17):

So even though it was a low likelihood event, the consequences associated with it were huge and that can be seen around the world with all the implications that it had. So again, it's that criticality argument rather than risk argument. So yes, it may not have been likely, but if it did happen, the consequences were huge.

Richard Robinson (01:39):

And an awful lot of this from our point of view comes down to the finance side of things because organisations are always trying to optimise return. And so what they try to do is push up the greatest availability at least cost. Now the problem with that, of course, is that the world, if you're relying on a single system, you can't gold plate a single system so that it won't fail. So if you're down to one system and it fails, then you must have a backup.

(02:03):

Now, we see this all the time in the electrical business because the economic regulators for the energy business sort of say, look, we want you to have cheap power. And so what they do is they drive, they get rid of the headroom basically in the network so that yes, you are using your assets at an optimum utility. So you're getting sort of the maximum value out of what you've spent on the resources. But there's no resilience in the sense that in the electrical business they talk about N minus one failures. And the intention is that if a single failure happens, like one transmission fails, the network shouldn't care. It should just take over. But that means you've got to have a surplus capacity to achieve that outcome. And obviously that's not an economic thing to do.

Gaye Francis (02:43):

So we're talking about not only resilience and where we sort of talk about the hardening of the network and some of that gold plating stuff, but it's also the redundancy, isn't it? Making sure that you've got another independent system that doesn't rely on the primary system, that in the event that does fail, that you've got some sort of backup.

Richard Robinson (03:03):

Correct. And there's lots of different ways to do it. And as we hammer in the book, you can't gold plate a single system. You just can't stop all single points of failure. And the only way to get high availability at low cost is have two redundant systems in parallel. Now they don't have to be fully redundant and all the other things that you do, but if you don't actually analyse the system like that and that's what an engineering process will do for you, then you really don't know what's going to happen when it all goes wrong.

Gaye Francis (03:31):

So I think there's a couple of lessons learned out of this. IT debacle from last week is that it was absolutely foreseeable, it wasn't an accident. And engineering organisations are required to look at those credible worst case scenarios that can happen and what you can do and put in place to make sure that they're managed at that time. So I think it was a bit of a cop out if they're saying in the news that it was an accident and it couldn't have been seen because systems fail all the time.

(04:04):

I think one of the other interesting things that we've talked around the office this morning was how as a society we've come to rely on technology and electronic everything and that people didn't know what to do. I think that threw it into more chaos. We were actually just talking, Richard and I were in New Zealand last week and all the things that you had to have and you actually had to have an electronic ticket to get on the plane. So if you didn't have an iPhone or a Samsung or something, paper tickets are becoming rarer and rarer. And to juggle your phone and your passport and your baggage and all that sort of stuff.

Richard Robinson (04:42):

I watched you do that. It wasn't a great success.

Gaye Francis (04:45):

I felt like the little old lady, but that's okay. What I was saying is technology's supposed to make things easier, but sometimes it doesn't when all of those things you have to have the different access to different things on your phone at the same time.

Richard Robinson (05:01):

Well, I mean the way it's gone is, and it's like the IT giant stores, there's about five of them out there these days, and they've just dominated everything. But as a small organisation, we've actually gone to a lot of trouble to deconnect ourselves to those things. So we are not online all the time and it's the only way we can guarantee security because basically if you want to be secured, don't be online. I mean it's like you try to stop your kids getting online. I think you might not be successful in the long run, but basically if you don't want your information out there, don't be online.

(05:31):

It's the whole point of the WHS legislature for that is as you eliminate, if you can, you can't eliminate, then you reduce. People aren't testing the elimination option like they ought to be. And I don't fully understand quite why that's the case.

Gaye Francis (05:49):

I've had an absolute brain blank.

Richard Robinson (05:52):

Well that's not constructive, Gaye! So where would you like to land this thing? I think our point about this is that you need to positively demonstrate due diligence about what you're doing. And due diligence means that you take into account the credible critical issues. I mean, it might be reasonable to say a meteorite strike can turn up, but we're not going to worry about it because there's not an awful lot we can do about if it does happen.

Gaye Francis (06:14):

So what you're saying is you look at the credible worst case scenarios, but then also what the controls that you can put in place are. And I think that's where people are missing is they're not actually looking for those additional things that can be done.

Richard Robinson (06:27):

Well, you might remember those reviews we did for the bank a while back and we came across, there was another big consulting firm doing a bottom up availability assessment of what the bank backup systems were. And we came in top down. And I remember talking to the senior guy at the backup center and I was asking questions, is there any particular time when it's more important for the bank to be online than other times during the day? He said, oh yes, there's two times. There's one about 12 at midnight where we balance up between all the other banks. He said if we're not online at that particular half hour or so, and it's all done very quickly, but if we're not online then our books are out of balance for the whole of the next day. He said that causes an awful lot of trouble. So for that window, we want to definitely be online.

(07:08):

He said, the rest of the time we write all the data to two different sites, we can rerun the whole thing. Maybe people get bumped off for half an hour or an hour or something like that, but the system will recover because we've got two genuinely independent sites, two genuinely independent processes, and we write the data to both sites. It's not a problem. I mean there will be some inconvenience, but we have redundancy, he said. But at that particular window for that half hour in the day, we don't have redundancy for that one if we either hit it or we miss it

Gaye Francis (07:38):

And we must be online for it. I think that's another interesting point, isn't it? When you're doing these sort of reviews, you really do have to appeal to the people that live and die by it and they have to understand their business and those critical requirements of their business to be able to say what's credible and critical, worst case scenario sort of stuff.

Richard Robinson (07:59):

And that's the senior decision makers. Now sometimes they don't fully understand just what the criticalities are and perhaps that sometimes are a little bit upset to find people like us asking these sorts of questions. But if you don't ask them, you really don't find out. And what's funny about that was I said, this other firm, which once upon a time I used to work for doing this bottom up review when we were sort of comparing notes between what we were doing, it wasn't that either of us were wrong, both provide insight, but which was the more important one for that particular task. It was the criticality question, not the average availability.

Gaye Francis (08:36):

I think even some of the work that we've just done recently and that context is all important, isn't it? We were doing a review last week and to actually set the context of where they wanted to go was the most important part because that then gives you insight into the criticality and often you've got to expand the context to a higher level to get that understanding.

Richard Robinson (09:00):

Correct.

Gaye Francis (09:01):

So I guess as a wrap up from our viewpoint, the IT incident last week was definitely not an accident. It was predictable and foreseeable, in our terms. It was a critical incident. Yes, it may not have been likely, but the consequences were huge that you would've expect a large organisation to have backup processes. And even if it hadn't have been the source to have the backup processes, the people that relied on the system should have understood that criticality as well and had systems in place to deal with it.

Richard Robinson (09:45):

Indeed.

Gaye Francis (09:46):

So thanks for joining us, we'll see you next time.

Introducing Risk! Engineers Talk Governance

Risk Engineers Talk GOvernance
Special episode

In this special introduction episode of Risk! Engineers Talk Governance, meet your hosts Gaye Francis and Richard Robinson who outline their due diligence engineering experience and why they are starting the podcast .

Transcript

Gaye Francis (00:00):

Good morning and welcome to our podcast Risk! Engineers Talk Governance. I'm Gaye Francis and Richard Robinson's here and is my business partner.

(00:09):

How you going this morning, Richard?

Richard Robinson (00:10):

I'm particularly well Gaye, although it is a bit chilly.

Gaye Francis (00:12):

It is a bit chilly here in Melbourne. Winter has definitely arrived.

(00:18):

So this first podcast is really an introduction to what we're going to do. We'll introduce ourselves, what we do, what we hope to cover during the first season of the podcast, and some of the episodes that we'll cover, and just a little bit of chat so you get to know Richard and me.

(00:36):

We're not particularly good at introducing ourselves. So I'm gonna have a go at introducing Richard and then he'll have a go at introducing me. Richard's a career risk and due diligence engineer. He's been in the business for over 40 years. He works across a whole lot of industries, Rail, Road, Marine, Chemical, Water, Gas, Electricity... you name it. He's been there and done that. So Richard's really seen as one of the world leaders risk and due diligence business.

(01:07):

I've been working with Richard at R2A for over 25 years and started as a grad engineer. So we've worked together a lot. Richard also does a lot of courses through Engineering Education Australia, as well as in-house courses of our own on risk and due diligence and project due diligence and governance. And we also have a couple of booklets that we've co-authored together- Criminal Manslaughter, Engineering Due Diligence, and our new one Project Governance.

(01:34):

So, Richard Richard's been in the industry for a long time. He does have a little bit of a warped sense of humor and you need to get to know him a little bit better. My sister actually worked with us many years ago and she said he reminded her of Mr. Bean and some of his tall lankiness and his jokes.

(01:54):

So, that was a pretty nice introduction, Richard. So I'm hoping for the same.

Richard Robinson (01:59):

Well, good morning everyone. <laugh>. This is Gaye Francis, my business partner, now of about 20 years, although we've been working together for close to 30 years as she pointed out. In that time she got married and had two kids, Charlotte and Amelia. And I've gotta say at this point, the husband got displaced abruptly on her phone by the kids when they arrived!

(02:22):

Just to give you an idea, one of the first things I said to her when we first met, she was asking what this risk business was about and I said, well, think about it. There are three key terms, they are eek, e and oops. And she said, well, yes, I can add a fourth term to that. And that is grrr, which mostly happens when you're working with older males. So she's had a few life experiences like that, I understand <laugh>.

(02:46):

Possibly the other thing which I found most entertaining about her is that she actually trained as a chemical engineer. And when she went into industry, and I had personal experience with this 'cos I was there, she discovered she was actually allergic to chemicals, which is, and I have to point out actually never gets old <laugh>.

Gaye Francis (03:03):

It's a bit embarrassing, but I, I must admit, some of the things that I've done at R2A has got me outta my comfort zone and challenged me, no end. I'm actually scared of heights and I've climbed up the side of the ship, a side of a ship out in the strait and in Tasmania and many other places around Australia. I've also climbed up onto the top of the stadium here in Melbourne to look at some roofing issues. I got the phone call to go and do that at site inspection. Richard was actually interstate and he said, can you go and do this site inspection for me? And I said, I'm wearing a skirt dress today. So raced down at lunchtime to buy pants and went and did this site inspection in the afternoon on the top of, um, yeah, a stadium roof.

Richard Robinson (03:43):

You never mentioned that you actually bought pants, you just complained that there was a problem.

Gaye Francis (03:47):

I wasn't gonna go into a site inspection like that! So yes, I've been taken out of my comfort zone a number of times.

(03:54):

So as we have said, we're business partners and we've been working at R2A for 30 years, and are career risk and due diligence engineers. We stayed in the industry and been boutique consultants, I guess, for that time. In that, I think we like to help people to solve their problems. You know, the risk business industry has become very complex. And there's a lot of resources going into it, and I'm not sure that organizations are getting bang for buck for what they're putting into it.

Richard Robinson (04:26):

That's completely the case. I mean, basically so far as we can tell, the OHS business in particular has turned into an industry, that that's sort of got a life of its own that's just quite independent of all corporate objectives and things like that. Which so far as we can tell is costing an awful lot of organizations an awful lot of money for very little result.

Gaye Francis (04:44):

And I guess our point of difference is that we come from the common law viewpoint of what would be expected to be done in the event that something happens. Which is very, very different from just applying the risk management standard, for example. So we sort of combine those two, come with a due diligence process to make organizations look at what their risk issues are and more importantly, what they have to have in place to, to manage these things.

Richard Robinson (05:12):

Yeah. It actually goes a bit further than that because one of the curious things about us, and I know a number of people have been very surprised by this about us, is that if we to figure out that we're not achieving things because, perhaps sometimes the O H S faction has particularly well entrenched and we haven't been able to get the lawyers to actually correct matters, we simply walk away. It doesn't matter, people paying us good money, if we can't achieve anything worthwhile, then we won't keep doing it. And we've walked away from major regulators in both major jurisdictions and in federal regulators who so far as we can tell, weren't applying due diligence out as expressed in the common law, which is what turned up in the WHS legislation.

Gaye Francis (05:50):

So yes, we're a little bit different in that way, but we love what we do and we really do feel that we make a difference with the people that we work with.

(05:59):

So why this podcast? So we, we've done a number of webinars, but we get asked interesting questions all throughout our work. And so we thought this podcast might be a format to be able to explore some of those issues that people ask us questions about consistently. So some of the things that we've got as our hot topics to talk about in this first season are ALARP versus SFAIRP, which is still creating a lot of confusion within the industry and organizations.

Richard Robinson (06:34):

Perhaps what confuses us the most, I mean, it all sort of popped up in 2004 in Victoria after Maxwell QC reviewed the WHS Act in Victoria, and then it got transferred into the whs legislation in most jurisdictions in 2011, 2012. But it's still causing grief and difficulty and it's generally with the technical parties, not the legal side of things; lawyers understand it quite well.

Gaye Francis (06:55):

And they're trying to align the two and there are key differences between the two terms, but people are saying that they equate to the same thing. Many industries are saying that they're equating to the same thing.

Richard Robinson (07:07):

Well, it is true, a rose by any other name. And a lot of people have been basically defining ALARP as SFAIRP, but we don't understand why you bother to do that. You might as well make it clear there was a difference and that you've changed and effectively moved to the right place.

Gaye Francis (07:21):

Mm-hmm. <affirmative>. So another (topic), we get a lot of discussion points on is standards and how standards are used. And they're really backwards looking; they're written retrospectively and they're not forward looking.

Richard Robinson (07:35):

And the way Australia's been using standards lately, we are actually going backwards. Because under the whs legislation for example, it's quite clear you've got to achieve things 'so far it's reasonably practical'. That is, if you can do better than the standard, than you've gotta get there. So the standards are merely the starting point, if you're talking about a technical standard, you can't design by standards and have useful innovation. And so we, as far as we can tell, innovation is being suppressed in way by the use of standards

Gaye Francis (08:03):

And the comment of a lot of organizations "we've always done it that way" doesn't roll anymore. No, you can't do that. You've gotta always look forward. What else can we do?

Richard Robinson (08:13):

To the extent that you have control, you have to demonstrate that you've done the best that you can.

Gaye Francis (08:19):

And that's for all parties involved in the process, not just, you know, a single party.

(08:25):

Code of practice in the ISO 31000, there's a mismatch of ideas there and that's unfortunate.

Richard Robinson (08:33):

ISO 31000 has done a lot of damage to Australian industry in the last 20 years. And since it's now inconsistent with the legislation, we don't understand why people are still basically designing to it. An awful lot of governments trying to do it too. And this just doesn't make sense anymore.

Gaye Francis (08:47):

Regulations and license to trade. One of the interesting things there is the requirements of the regulators are often or, or can be, um,

Richard Robinson (08:57):

Inconsistent.

Gaye Francis (08:58):

Inconsistent. Thank you Richard. With the, the legislation. So, some organizations are actually having to do two processes to get one for a license to trade and then to meet their statutory obligations.

Richard Robinson (09:12):

Yes. Particularly when the regulators got it wrong. Um, it's one of these things, if you want the license to trade, you got to satisfy the regulator. If you want to satisfy the legislation you often have to do something different. And that's when we often have to walk away from a regulator when they don't recognize that.

Gaye Francis (09:25):

So many of these topics and some of our regular listeners to our webinars and (other resources) will have heard us say this and we've sort of tiptoed around some of these subjects over the last 10 years as to, not to offend anyone, but I think as we go further and further in this legislation, as Richard says it's been in Victoria since 2004 and in most of the rest of Australia since 2012, we're now 10 years down the track plus and we're still facing some of the issues that you would expect to see in the first couple of years of this legislation.

(10:04):

A couple of other interesting topics that we have on the cards is risk appetite and zero harm and organizations trying to relate those two ideas of risks. They're actually two different risk models.

Richard Robinson (10:16):

Yeah. And the confusion is mostly at board level. I don't think the troops have the confusion. It's mostly at board level. And we've briefed a number of boards lately where they simply didn't understand. And so far as we can tell, they've been taking their advice exclusively from management consultants. Um, and that's

Gaye Francis (10:33):

Not the technical view

Richard Robinson (10:34):

And there's been no technical view. And when you live in advanced technological society, that doesn't make a lot of sense.

Gaye Francis (10:39):

<affirmative>. And the language of risk and the complexity of it and how people are actually using some of the words.

Richard Robinson (10:47):

Well, just risk alone, it's a mess. I mean, the insurance world talks about it as the now, and most technical people think of it's likely and consequence simultaneously, but when you're in court and it's all gone wrong, and the facts are certain it's a particular instance, and you really talk about the likelihood of that particular instance occurring. And so when people use the word risk, everyone's confused.

Gaye Francis (11:07):

Mm-hmm. <affirmative>.

(11:08):

So they're some of the hot topics that have been our standout items and concern I guess over the last 10 years and what people have ome to us and said 'we'd like to know more about this'. But we really want this podcast to be a timely, interesting session. So if any of our listeners have got any ideas and things that they'd like to discuss

Richard Robinson (11:29):

Well, people that they'd like us to interview. Probably in the second season we expect to be actually interviewing various people in various (organisations) who've had particular frustrations, particularly when somebody's, for example, adapted the mismanagement standard to the septe process. That's crime prevention through design. There's some weird things going on out there that make no sense.

Gaye Francis (11:49):

<affirmative> and even industry specific things. So the topics that we've sort of outlined go across the industries, but there are some issues of concern and issues facing specific industries that are relevant there as well.

Richard Robinson (12:02):

Probably particularly important. So just people understand. Uh, I mean, um, just before Covid, R2A together with the Victorian Bar sponsored the professor and law and public policy out of Cambridge, David Howth, and the reason why we're interested in him is he's got a book of out of law and engineering, and the point that he makes on his presentations is that what the lawyers are actually doing, at least the big UK and US firms, is that they're actually adopting and deliberately studying the engineering design process. Because basically the point he makes is if you're a lawyer, and it's what happens with engineers, and somebody turns up with a problem or something they want to do, and then basically what you're saying is in the circumstances, these are the options, and which one in all your circumstances is the best and that's the best way forward.

(12:44):

And that's just the base act in engineering design process, um, and which the engineers have been doing now for a very long time. But which seems to be sort of a 10 year transition for the for the lawyers. We certainly came across this long time ago with a lawyer from Baker Mackenzie, and he made the point, there are two types of lawyers out there: those who will tell you what the law is, and those who say, in the circumstances, what are your options and which is the best? So certainly a lot of lawyers in Australia have been thinking about it, although we haven't necessarily seen all the law firms adopting it.

Gaye Francis (13:15):

<affirmative>. So that's sort of an overview of our podcast season one. We hope you can join us the next couple of episodes. And as we have both said, if you'd like us to talk about anything in particular, we'd love to for you to drop us a line. So have a great day and we hope to see you next time.