[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?
                                 ______
                                 
                                 
                                 
                                 
                                ------                                

                                             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?
                                 ______
                                 
                                 
                                 
                                 
                                ------                                

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

                                 
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