[House Report 105-731]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-731
_______________________________________________________________________


 
                    SELF-AUDIT PROMOTION ACT OF 1998

                                _______
                                

 September 18, 1998.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


   Mr. Goodling, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2869]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 2869) to amend the Occupational Safety 
and Health Act of 1970 to exempt safety and health assessments, 
audits, and reviews conducted by or for an employer from 
enforcement action under such Act, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Self-Audit Promotion Act of 1998''.

SEC. 2. EMPLOYER SAFETY AND HEALTH ASSESSMENTS, AUDITS, AND REVIEWS.

    Section 8(b) of the Occupational Safety and Health Act of 1970 (29 
U.S.C. 657(b)) is amended by adding ``(1)'' before ``In making'' and by 
adding at the end the following: ``Records, reports, or other 
information obtained or prepared in connection with safety and health 
assessments, audits, or reviews conducted by or for the employer shall 
not be required to be disclosed in any inspection, investigation, or 
enforcement proceeding pursuant to this Act, except as provided in 
paragraph (2). Such records, reports, or other information may be 
disclosed in the course of an inspection, investigation, or enforcement 
proceeding to the extent that the owner or operator of the facility 
expressly authorizes the disclosure.
    ``(2) Such records, reports, or other information may be required 
to be disclosed to the extent that--
          ``(A) the record, report, or information is sought as part of 
        a criminal proceeding; or
          ``(B) the record, report, or information is sought for 
        purposes of establishing the cause of, or an employer's actual 
        knowledge of, a particular alleged violation, but only if--
                  ``(i) the Secretary establishes, on evidence 
                independent of such records, reports, or information, 
                that a condition or practice of the employer is not in 
                compliance with the requirements of this Act; and
                  ``(ii) the employer has not undertaken good faith 
                efforts to address items identified in the assessment, 
                audit, or review, or initiated a process to abate 
                hazards or potential hazards identified in the 
                assessment, audit, or review.
    ``(3) For purposes of this subsection, the term `health and safety 
assessments, audits, or reviews' means an evaluation of 1 or more 
processes, operations, or facilities or of management systems related 
to such processes, operations, or facilities that is designed to 
identify and prevent noncompliance with this Act and hazards or 
potential hazards to employees. The records, reports, and information 
subject to paragraph (1) do not include medical records or records of 
employee exposure to potentially toxic materials or harmful physical 
agents, or records of work-related deaths, injuries, and illnesses 
required to be maintained under this section.''.

                                Purpose

    The purpose of H.R. 2869 is to amend the Occupational 
Safety and Health Act (OSH Act) to establish criteria for 
access by the Secretary of Labor to certain employer records of 
audits and assessments relating to safety and health.

                           Legislative Action

    The Subcommittee on Workforce Protections held a series of 
three hearings in 1997 on the subject of the Occupational 
Safety and Health Administration's (OSHA's) reinvention plans. 
Those hearings were the basis of several bills introduced by 
Representative Cass Ballenger on November 7, 1997, including 
H.R. 2869.
    The first hearing was held on June 24, 1997, to learn the 
views and perspective of OSHA in its effort to ``reinvent'' the 
agency. The Acting Assistant Secretary for OSHA, Greg Watchman, 
testified at the hearing.
    The second hearing was held on July 23, 1997, to examine 
OSHA's reinvention project, hearing testimony from a variety of 
individuals who have either studied or had recent experiences 
with OSHA. The witnesses included Mr. Ronald D. Schaible, 
Director, Global Safety, AMP Incorporated, Harrisburg, 
Pennsylvania, testifying on behalf of the National Association 
of Manufacturers; Ms. M. Kathleen Winters, Corporate Manager, 
Environmental Health and Safety, Mack Printing Company, Easton, 
Pennsylvania, testifying on behalf of Printing Industries of 
America, Inc.; Dr. Gary Rainwater, President, American Dental 
Association, Dallas, Texas; Mr. James J. Gonzalez, Attorney-at-
Law, Holland & Hart LLP, Denver, Colorado; Mr. Richard S. 
Baldwin, Safety and Health Director, BE & K Engineering and 
Construction Company, Birmingham, Alabama, testifying on behalf 
of Associated Builders and Contractors; Professor John 
Mendeloff, Graduate School of Public and International Affairs, 
University of Pittsburgh, Pittsburgh, Pennsylvania; Ms. Lee 
Anne Elliott, Executive Director, Voluntary Protection 
Programs, Participants' Association, Falls Church, Virginia; 
and Mr. Michael J. Wright, Director, Health, Safety and 
Environment, United Steelworkers of America, Pittsburgh, 
Pennsylvania.
    The third hearing was held on September 11, 1997, to hear 
from individuals with a first-hand knowledge of OSHA's 
reinvention program and on changes that should occur as OSHA 
moves into the 21st century. The following witnesses testified: 
Mr. Gerald V. Anderson, President, Anderson Construction 
Company, Inc., Fort Gaines, Georgia, testifying on behalf of 
the Associated General Contractors of America; Mr. James L. 
Abrams, Attorney-at-Law, Denver, Colorado; Mr. Frank A. White, 
Vice President, Organization Resources Counselors, Inc., 
Washington, DC; Mr. Michael C. Nichols, Vice President, 
Management Development/Human Resources, SYSCO Corporation, 
Houston, Texas; Mr. Norbert Plassmeyer, Vice President and 
Director of Environmental Affairs, Associated Industries of 
Missouri, Jefferson City, Missouri; and Nicholas A. Ashford, 
Ph.D, J.D., Professor of Technology and Policy, Massachusetts 
Institute of Technology, Cambridge Massachusetts.
    The Subcommittee on Workforce Protections held two 
legislative hearings in 1998 on several bills amending the OSH 
Act, including H.R. 2869.
    The first hearing on legislative proposals to amend the OSH 
Act was held on March 27, 1998. The following witnesses 
testified: Ms. Claudia Brumm, Director, Risk Management, Borg 
Warner Automotive, Inc., Chicago, Illinois, testifying on 
behalf of the Labor Policy Association; Mr. Linwood O. Smith, 
Vice President, Risk and Safety Management, T.A. Loving 
Company, Goldsboro, North Carolina, testifying on behalf of the 
Associated General Contractors of America; Mr. James ``Mike'' 
McMichael, The McMichael Company, Central, South Carolina, 
testifying on behalf of the National Association of Home 
Builders; Mr. Ronald W. Taylor, Attorney-at-Law, Venable, 
Baetjer & Howard, Baltimore, Maryland, testifying on behalf of 
the United States Chamber of Commerce; Mr. Jerry Hartman, 
President, Reese Press, Inc., Baltimore, Maryland, testifying 
on behalf of the Printing Industries of America, Inc.; and Ms. 
Margaret M. Seminario, Director, Occupational Safety and Health 
Department, American Federation of Labor-Congress of Industrial 
Organizations (AFL-CIO), Washington, DC.
    The second hearing on legislative proposals to amend the 
OSH Act was held on April 29, 1998. The following witnesses 
testified at the hearing: Mr. Charles N. Jeffress, Assistant 
Secretary for Occupational Safety and Health, Occupational 
Safety and Health Administration, U.S. Department of Labor, 
Washington, DC; Mr. George R. Salem, Attorney-at-Law/Partner, 
Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC, 
testifying on behalf of the National Association of 
Manufacturers; Mr. Richard E. Schwartz, Attorney-at-Law/
Partner, Crowell & Moring LLP, Washington, DC, testifying on 
behalf of the American Iron & Steel Institute; Mr. John W. 
Bishop, President, Gurnee Heating & Air Conditioning 
Corporation, Closter, New Jersey, testifying on behalf of 
Associated Builders and Contractors; Mr. David G. Sarvadi, 
Attorney-at-Law, Keller and Heckman, Washington, DC; and Mr. 
Thomas J. Meighen, Safety & Risk Manager and Vice President, 
Stromberg Sheet Metal Works, Inc., Beltsville, Maryland, 
testifying on behalf of the Mechanical Electrical Sheet Metal 
Alliance.
    The Subcommittee on Workforce Protections approved H.R. 
2869 by voice vote on May 14, 1998, and ordered the bill 
favorably reported to the Full Committee. The Committee on 
Education and the Workforce approved H.R. 2869, as amended, by 
voice vote on June 10, 1998, and ordered the bill favorably 
reported to the House.

                            Committee Views

                          Need for Legislation

    This quote, in a nutshell, describes the need for H.R. 
2869: \1\
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    \1\ U.S., Congress, House, Committee on Education and the 
Workforce, Subcommittee on Workforce Protections, Hearing to Examine 
the Occupational Safety and Health Administration's Reinvention 
Project, 105th Cong., 1st sess., ser. no. 105-25. Testimony of Mr. 
Frank A. White, Vice President, Organization Resources Counselors, 
Inc., Washington, DC, September 11, 1997.

          A fundamental principle of the ``New OSHA'' is that 
        its enforcement resources should be aimed at those 
        employers that have demonstrated a lack of commitment 
        to providing a safe and healthful workplace to their 
        workers. A common objective of virtually all of OSHA's 
        reinvention initiatives is to provide incentives to 
        employers to develop and improve their safety and 
        health programs, a basic element of which is the 
        performance of hazard assessments and system reviews 
        that collectively may be referred to as ``safety and 
        health audits.'' Yet remarkably and inexplicably, 
        OSHA's policies and practices with respect to safety 
        and health audits have the net effect of discouraging 
        rather than encouraging effective auditing programs by 
        employers, especially those that may for the first time 
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        be considering adopting such programs.

    The importance of safety and health audits to the safety 
and health of workers is widely recognized. Effective audits 
and assessments for safety and health, like audits and 
assessments conducted for other purposes, are not only critical 
for trying to maintain compliance with complex laws and 
regulations, but are also helpful for identifying potential 
problems and conditions that could increase the likelihood of 
future accidents and violations. \2\
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    \2\ See, e.g,. Ernest Jorgenson, ``Safety and Health Auditing,'' 
Professional Development, April 1998, pp. 29-31.
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    OSHA, too, has recognized the importance of safety and 
health audits. In 1989, OSHA issued voluntary guidelines for 
safety and health program management.\3\ The guidelines 
``advised and encouraged'' all employers to institute programs 
for safety and health in their workplaces which include 
``worksite analysis * * * to identify not only existing hazards 
but also conditions and operations in which changes might occur 
to create hazards.'' \4\ OSHA continues to use the 1989 
guidelines as the model for effective safety and health 
management.
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    \3\ 54 F.R. 3904-3916.
    \4\ Ibid, at 3909.
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    In 1991, then-Secretary of Labor Lynn Martin wrote to over 
500 chief executive officers of large companies to encourage 
them to ``take a hard look at the health and safety of your 
company'' by regularly conducting and reviewing safety and 
health audits of company facilities.\5\ Secretary Martin's 
letter urged that safety and health audits be considered a 
critical part of corporate management: ``As you do with 
financial audits, report the results of safety and health 
audits to your Board of Directors. Being mindful of worker 
safety and health is as much a part of management's commitment 
to upholding corporate responsibility as striving to maintain 
shareholder value.''
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    \5\ A copy of the Secretary's letter is attached to the written 
statement of Gerard Scannell, Assistant Secretary for Occupational 
Safety and Health, U.S. Department of Labor, who testified before a 
hearing of the House Committee on Education and Labor on November 21, 
1991 (102nd Cong., 1st sess.).
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    While the Department of Labor's policy statements, such as 
the 1989 voluntary guidelines and the Secretary of Labor's 1991 
letter to corporate executives, have urged companies to conduct 
safety and health audits, OSHA's enforcement policies and 
practices are having the opposite effect. In the absence of 
either legal limitations or self-imposed restrictions, OSHA 
may, and does, demand full access to company records, including 
records and documents related to a company's own safety and 
health audits and assessments, in the course of an inspection 
or investigation. OSHA may use the employer's own records to 
identify potential violations or as evidence of violations, or 
as evidence it can use against an employer to prove that a 
violation is ``willful.'' \6\ As a result, the more thorough 
the employer's audits and assessments are, the more potential 
risk of legal liability that employer assumes.\7\
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    \6\ U.S., Congress, House, Committee on Education and the 
Workforce, Subcommittee on Workforce Protections, Review of the 
Occupational Safety And Health Act, 105th Cong., 2nd sess. (April 29, 
1998). Testimony of Testimony of Mr. George R. Salem, Attorney-at-Law/
Partner, Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC.
    \7\ U.S., Congress, House, Committee on Education and the 
Workforce, Subcommittee on Workforce Protections, Review of the 
Occupational Safety And Health Act, 105th Cong., 2nd sess. (March 27, 
1998). Testimony of Ms. Claudia Brumm, Director, Risk Management, Borg 
Warner Automotive, Inc., Chicago, Illinois. See also, ``The Dangers of 
'Speculative' Safety Audits,'' Occupational Hazards, November 1997, pp. 
14-15.
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    There currently exist few legal limitations on OSHA's 
access to an employer's records relating to safety and health, 
including records of safety and health audits.\8\ An employer 
may insist that OSHA obtain an administrative subpoena to 
review the employer's records.\9\ The test for such a subpoena, 
however, is not very demanding: \10\
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    \8\ In recent years OSHA has demanded access not only to an 
employer's own safety and health audit records, Secretary of Labor v. 
Hammermill Paper Division, 15 OSHC 1849 (S.D. Ala, 1992) and Reich v. 
Hercules, Inc., 857 F.Supp. 367 (D.NJ, 1994), but also to such other 
records as operation log books and records of employee disciplinary 
records, Reich v. Montana Sulphur & Chemical Co., 32 F. 3d 440 (9th 
Cir, 1994) and records of production quotas, incentive plans and 
payments, and employee task completion times. Reich v. Sturm, Ruger & 
Co., 903 F.Supp. 239 (D.NJ 1995).
    \9\ Most courts have held that the Fourth Amendment protection 
against unreasonable search and seizure requires OSHA to obtain a 
warrant or subpoena to conduct a nonconsensual review of an employer's 
records regardless of whether the records involved are required to be 
maintained by OSHA regulations. See McLaughlin v. Kings Island, 849 F. 
2d 990 (6th Cir. 1988) and Brock v. Emerson Electric, 834 F.2d 994 
(11th Cir. 1987). The Fourth Circuit has permitted inspection of 
required injury and illness records without a subpoena or search 
warrant, in McLaughlin v. A.B. Chance Company, 842 F. 2d 724 (4th Cir. 
1988).
    \10\ United States v. Sturm, Ruger & Company, Inc., 84 F.3d 1, 4 
(1st Cir. 1996).

          The requirements for enforcement of an administrative 
        subpoena are not onerous. In order to obtain judicial 
        backing the agency must prove that (1) the subpoena is 
        issued for a congressionally authorized purpose, the 
        information sought is (2) relevant to the authorized 
        purpose, (3) adequately described, and (4) proper 
        procedures have been employed in issuing the subpoena. 
        See, United States v. Morton Salt Co., 338 U.S. 632, 
        652, 70 S.Ct. 357, 368-69 (1950); Oklahoma Press, 3227 
        U.S. 186, at 208, 66 S.Ct. 494, at 505; United States 
        v. Comley, 890 F.2d 539, 541 (1st Cir. 1989). As long 
        as the agency satisfies these modest requirements, the 
        subpoena is per se reasonable and Fourth Amendment 
        concerns are deemed satisfied. Oklahoma Press, 327 U.S. 
---------------------------------------------------------------------------
        at 208, 66 S.Ct. at 505.

    The case of Secretary of Labor v. Hammermill Paper Division 
dealt directly with the issue of OSHA's access to an employer's 
self audit records. In the course of an inspection, OSHA had 
demanded all of the company's safety compliance audits for the 
years 1989, 1990, and 1991. The U.S. District Court questioned 
the wisdom of OSHA's demand, but nonetheless found that the 
demand for the safety audit records was within OSHA's legal 
authority: \11\
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    \11\ 15 OSHC at 1850.

          The secretary insists she is authorized, in her 
        discretion, to require production of these records by 
        subpoena. Notwithstanding the court's opinion that the 
        Secretary of Labor should not undertake this action, 
        this court does not have authority to control the 
        exercise of discretion by the Secretary of Labor. The 
        court is of the opinion, and finds that the Secretary 
        of Labor has statutory authority to compel the present 
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        disclosure.

    In the absence of legal limitations on OSHA's access to 
employer records of self audits and assessments, OSHA and the 
Department of Labor could nonetheless adopt internal policies 
to limit access to self audit records, given the importance of 
safety and health auditing to employee health and safety. Other 
government agencies, including the Environmental Protection 
Agency, have recognized the chilling effect that unfettered 
access to self audit records by a government enforcement agency 
has on the conduct of self audits.\12\
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    \12\ ``Routine agency requests for voluntary audit reports could 
inhibit auditing in the long run, decreasing both the quality and 
quantity of audits conducted.'' (Environmental Protection Agency's 1986 
Environmental Auditing Policy Statement, 51 F.R. 25,007). In addition, 
at least 20 states have enacted laws limiting government access to 
environmental audits.
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    OSHA and the Department of Labor, however, have refused to 
adopt a policy to voluntarily limit its access to company 
records of safety and health audits and assessments.\13\ This 
determination on the part of OSHA and the Department of Labor 
to use an employer's safety and health audits in enforcement 
proceedings is, in turn, discouraging the effective use of such 
audits, which thereby diminishes workers' safety and health. 
Testimony to this effect was presented during hearings before 
the Subcommittee on Workforce Protections:\14\
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    \13\ Employers have also sought protection for safety and health 
audits under various common law privileges. See testimony of Ms. 
Claudia Brumm, Director, Risk Management, Borg Warner Automotive, Inc., 
Chicago, Illinois, before the Subcommittee on Workforce Protections, 
March 27, 1998. Such efforts have not generally been successful in 
protecting audits from disclosure to OSHA, see Reich v. Hercules, Inc., 
857 F.Supp. at 244, and to the extent the employer attempts to ``fit'' 
the criteria of common law privileges the usefulness and effectiveness 
of the audit process is undermined. See, testimony of Ms. Claudia Brumm 
during hearing of March 27, 1998.
    \14\ U.S., Congress, House, Committee on Education and the 
Workforce, Subcommittee on Workforce Protections, Review of the 
Occupational Safety And Health Act, 105th Cong., 2nd sess. (April 29, 
1998). Testimony of Mr. George R. Salem, Attorney-at-Law/Partner, Akin, 
Gump, Strauss, Hauer & Feld, LLP, Washington, DC.

          Completeness and candor are essential to the success 
        of any safety and health auditing program. The program 
        must encourage critical self-analysis and open, 
        internal disclosure of deficiencies in order to assure 
        full evaluation, prioritization and timely corrective 
        action. Even for companies with sophisticated safety 
        and health auditing programs, OSHA's position on the 
        treatment of such audits for enforcement purposes has, 
        in many cases, directly resulted in or contributed to 
        the implementation of practices and procedures that 
        detract from the candor, timeliness and ultimately, the 
        use of the audits. These include precautions for 
        assuring that the language in audit reports is 
        sanitized (i.e., identifying a condition or practice 
        for follow-up action without describing it as a 
        violation), and often cumbersome and costly 
        arrangements with outside legal counsel to protect the 
        audit information from disclosure through reliance on 
        the attorney-client privilege.
          It must be recognized that in seeking to achieve 
        important corporate goals and objectives--particularly 
        those involving regulatory obligations such as improved 
        employee safety and health--companies will at the same 
        time institute business practices designed to control 
        or minimize perceived risks of legal liability. Thus, 
        OSHA's position has operated to encumber the auditing 
        process and dilute its effectiveness, even in the many 
        companies that are committed to maximizing worker 
        safety and health and that understand the benefits of 
        safety and health audits.
          For companies that do not have well-developed safety 
        and health programs and may be for the first time 
        considering implementation of an auditing program, 
        OSHA's position serves as an even more powerful 
        disincentive. On the one hand, OSHA claims to be giving 
        the highest priority to the development of incentives 
        for companies to implement effective safety and health 
        programs. On the other, the agency is turning its back 
        on removing perhaps the single biggest inhibitor to the 
        development of the critical auditing component of such 
        programs: the threat of using audits in enforcement 
        proceedings.

                       explanation of legislation

    H.R. 2869 provides partial protection against nonconsensual 
disclosure of records and documents related to safety and 
health assessments, audits, and reviews. H.R. 2869 applies only 
to disclosure of such records and documents to OSHA in the 
context of an OSHA inspection, investigation, or enforcement 
proceeding. It does not affect disclosure to any party other 
than OSHA, for example, in civil litigation not involving OSHA 
enforcement.
    H.R. 2869 provides two exceptions to the protection for 
nonconsensual disclosure of records and documents related to an 
employer's safety and health assessments, audits, and reviews.
    First, the protection against nonconsensual disclosure does 
not apply when the record or report is sought as part of a 
criminal proceeding.\15\
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    \15\ Criminal penalties are authorized under the OSH Act in two 
circumstances: (1) in the case of a willful violation of an OSHA 
standard which caused death to an employee (29 U.S.C. Section 666(e)) 
and (2) for knowingly making a false statement, representation, or 
certification in an application, record, report, plan or other document 
required by OSHA (29 U.S.C. Section 666(g). As noted above, H.R. 2869 
does not apply to any non-OSHA proceeding, including a criminal 
investigation involving charges under another statute.
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    Second, the protection against nonconsensual disclosure 
does not apply if the record, report, or document is sought for 
the purpose of establishing the cause of, or the employer's 
actual knowledge of, a particular violation. However, the bill 
sets two preconditions on OSHA's access to the documents for 
these purposes: (1) OSHA has independently established evidence 
that a condition or practice of the employer is not in 
compliance with OSHA's standards or the OSH Act, and (2) the 
employer has not undertaken good faith efforts to address items 
in the audit or has not initiated a process to abate hazards 
identified in the audit.\16\
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    \16\ These preconditions would have to be met before an 
administrative subpoena for production of the records could be 
enforced. In order to gain enforcement of the subpoena for records of 
audits and assessments covered by H.R. 2869, OSHA must show by 
independent evidence that a condition or practice of the employer does 
not comply with OSHA standards or the OSH Act. Assuming such evidence, 
the employer who is resisting the subpoena may then show that he or she 
has undertaken good faith efforts to address items in the audit or 
initiated a process to abate the hazards identified in the audit or 
assessment. Rule 45 of the Federal Rules of Civil Procedure allows for 
in camera review by the court when a subpoena is resisted on grounds 
that the information sought is protected from disclosure.
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    H.R. 2869 provides this limited protection to ``records, 
reports, or other information obtained or prepared in 
connection with safety and health assessments, audits, or 
reviews conducted by or for the employer.'' ``Safety and health 
assessments, audits, or reviews'' includes any evaluation of a 
company's processes, operations, or facilities, or the 
management systems related to those processes, operations, or 
facilities, that is conducted for the purpose of identifying 
and preventing noncompliance with the OSH Act and hazards or 
potential hazards to employees. The bill specifically exempts 
from its coverage employee exposure and medicalrecords and 
records of injuries and illness required to be maintained by the 
employer under section 8(c) of the OSH Act.
    As noted above, OSHA has demanded access to an employer's 
own audit records for three purposes: in a ``fishing 
expedition'' to try to identify potential or actual violations 
of OSHA standards; to investigate potential causes of 
accidents; and as a basis for establishing employer knowledge 
in order to classify a violation as ``willful.''
    H.R. 2869 is intended to prohibit in all cases the 
nonconsensual use of an employer's own audits and assessments 
for OSHA to use in a ``fishing expedition'' to try to find 
potential or actual violations of OSHA requirements. The bill 
requires that as a precondition to nonconsensual disclosure 
that OSHA has already established that the alleged violation 
for which the record is sought exists. The Assistant Secretary 
for Occupational Safety and Health has agreed that OSHA should 
not use an employer's audit records for a ``fishing 
expedition'' for violations, or as a road map to identify 
potential or actual citations.\17\
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    \17\ U.S., Congress, House, Committee on Education and the 
Workforce, Subcommittee on Workforce Protections, Review of the 
Occupational Safety And Health Act, 105th Cong., 2nd sess. (April 29, 
1998). Testimony of Assistant Secretary Charles N. Jeffress, 
Occupational Safety and Health Administration, U.S. Department of 
Labor, Washington, DC.
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    H.R. 2869 does permit OSHA access to nonconsensual review 
of an employer's records related to audits and assessments for 
other purposes, to identify the causes of an alleged violation 
or an employer's actual knowledge of a violation, but only if 
the employer has not undertaken good faith efforts to address 
items identified in the employer's audit or assessment, or 
initiated a process to abate any hazards or potential hazards 
that have been identified in the audit or assessment process.
    In testimony before the Subcommittee on Workforce 
Protections, the Assistant Secretary for Occupational Safety 
and Health expressed opposition to H.R. 2869, and stated three 
reasons for the Department of Labor's opposition to the 
legislation.\18\ According to the Assistant Secretary, the bill 
(1) would harm employers by preventing OSHA from reducing 
penalties on the basis of the employer's ``good faith,'' (2) 
``would protect only bad actors--employers who have identified 
hazards, have failed to make good faith efforts to correct 
them, and wish to hide the evidence,'' and (3) would prevent 
OSHA access to critical information in investigating the causes 
of accidents.\19\
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    \18\ Ibid.
    \19\ Ibid.
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    As noted above, H.R. 2869 addresses only nonconsensual 
disclosure of records and information to OSHA. It does not 
prohibit an employer from voluntarily disclosing the contents 
of any such records, including doing so for the purposes of 
establishing ``good faith'' in order to receive a reduction in 
penalties otherwise being proposed by OSHA. The Assistant 
Secretary's concern that H.R. 2869 would harm or disadvantage 
``good faith'' employers is not well founded.
    Similarly, the Assistant Secretary's claim that H.R. 2869's 
limited disclosure of an employer's audit records ``would only 
protect bad actors'' is rhetoric that reflects an unwillingness 
to consider the conflict that exists between safety and health 
policy, which encourages full and frank assessment of hazards 
and potential hazards, and the Department of Labor's desire to 
have as much enforcement ``ammunition'' as possible against an 
employer. So-called ``bad actors''--employers who would use 
audits and assessments in order ``hide the evidence''--are not 
likely to conduct such audits in the first place. Furthermore, 
those employers would not be protected by H.R. 2869 if they do 
not demonstrate ``good faith'' in addressing items identified 
in their audits and assessments.\20\
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    \20\ In fact, unlike OSHA's current policy on employer safety and 
health audits, which does not distinguish between employers who conduct 
audits and ``do nothing'' with them and employers who use them to 
systematically identify and correct (``close'') problems and potential 
problems, H.R. 2869 establishes a policy of distinguishing between the 
two, based upon whether the employer has a process in place to close 
items identified in the audits.
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    Finally, the Assistant Secretary's argument that any 
protection afforded to an employer's own safety and health 
audits and assessments would severely impede OSHA's ability to 
carry out enforcement is simply not convincing. As George 
Salem, a former Solicitor of Labor, told the Subcommittee on 
Workforce Protections: \21\
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    \21\ U.S., Congress, House, Committee on Education and the 
Workforce, Subcommittee on Workforce Protections, Review of the 
Occupational Safety And Health Act, 105th Cong., 2nd sess. (April 29, 
1998). Testimony of Mr. George R. Salem, Attorney-at-Law/Partner, Akin, 
Gump, Strauss, Hauer & Feld, LLP, Washington, DC.

          It is easier to prove a case when you have access to 
        these audits, and as a former solicitor I can 
        understand that. It is easier also to prove a case if 
        you don't have a privilege against self-incrimination; 
        if you don't have due process; if you don't have any of 
        the constitutional guarantees that this country 
        provides.
          We have got to balance the public policy objective of 
        encouraging voluntary promotion of safety and health; 
        encourage employers to go above-and-beyond the 
        requirements of the law, against the ability to prove a 
        case. We've proved lots of cases. I've been involved 
        both in the government and out in dozens of egregious 
        cases including creation of the egregious policy, for 
        heaven's sake. And in those cases [even] where there 
        are fatalities you can prove your case. You don't have 
        to have audits to do that * * *

Mr. Salem concluded-- \22\

    \22\ Ibid.

          OSHA's current position [on disclosure of safety and 
        health audits] leads to the decreased use and 
        effectiveness of a critical component of voluntary 
        employer safety and health programs for the sake of 
        access to a possible source of evidence of a violation 
        or of an employer's willful behavior. OSHA's own 
        investigatory process provides sufficient access to 
        information necessary to determine whether violations 
        have occurred and whether violators acted willfully. 
        OSHA's insistence on retaining this mechanism, despite 
        its already capable investigatory authority, leads to 
        the inescapable conclusion that a legislative change is 
        essential to the advancement of workplace health and 
        safety.

                                Summary

    H.R. 2869 provides protection against routine disclosure of 
an employer's safety and health assessments, audits and reviews 
to OSHA. In order to obtain such audits and assessments against 
the employer's consent, OSHA must show that the employer has 
committed a violation of the OSH Act to which the employer's 
audit is relevant as to the cause or the employer's knowledge, 
and that the employer has failed to make ``good faith'' efforts 
or initiated a process to correct any hazards identified by the 
employer's audit. The bill also defines ``safety and health 
assessments, audits or reviews'' and provides an exception for 
employee medical and exposure records and injury and illness 
records maintained pursuant to OSHA regulations.

                      Section-by-Section Analysis

Section 1. Short title

    The title of the bill is the ``Self-Audit Promotion Act of 
1998''.

Sec. 2. Employer safety and health assessments, audits, and reviews

    This section amends section 8(b) of the Occupational Safety 
and Health Act of 1970 (29 U.S.C. Section 657(b)) to provide 
protection, under certain circumstances, for reports and other 
information regarding an employer's safety and health 
assessments, audits and reviews against disclosure to OSHA 
during inspections, investigations, or enforcement proceedings.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill amends the Occupational Safety and Health Act 
(OSH Act) to establish criteria for access by the Secretary of 
Labor to certain employer records of audits andassessments 
relating to safety and health. The bill does not prevent legislative 
branch employees from receiving the benefits of this legislation.

                   Constitutional Authority Statement

    The Occupational Safety and Health Act and the amendments 
thereto made by this bill are within Congress's authority under 
Article I, section 8, clause 3 of the Constitution.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act requires a statement of whether the provisions of 
the reported bill include unfunded mandates. This bill amends 
the Occupational Safety and Health Act (OSH Act) to establish 
criteria for access by the Secretary of Labor to certain 
employer records of audits and assessments relating to safety 
and health. As such, the bill does not contain any unfunded 
mandates.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 2(l)(3)(A) of Rule XI and clause 
2(b)(1) of Rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the body of this report.

 Statement of Oversight Findings of the Committee on Government Reform 
                             and Oversight

    With respect to the requirement of clause 2(l)(3)(D) of 
Rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 2869.

                           Committee Estimate

    Clause 7 of Rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2869. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 2(l)(3)(B) of 
Rule XI of the House of Representatives and section 308(a) of 
the Congressional Budget Act of 1974 and with respect to 
requirements of 2(l)(3)(C) of Rule XI of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 2869 from the Director of the Congressional Budget 
Act:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 14, 1998.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce, U.S. House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2869, the Self-
Audit Promotion Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Cyndi 
Dudzinski.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 2869--Self Audit Promotion Act of 1998

    H.R. 2869 would enable employers to withhold from the 
Secretary of Labor records and reports obtained during a 
occupational safety and health review conducted by or for the 
employer. Disclosure of such information could be required if 
it is sought as part of a criminal proceeding. Disclosure could 
also be required for the purposes of establishing the cause or 
employer's knowledge of a particular violation, but only if the 
Secretary established that the employer was not in compliance 
with the act and if the employer had not undertaken good faith 
efforts to address items identified by the employer's review.
    Under current law, access to an employer's self audit 
report provides information that facilitates the Occupational 
Safety and Health Administration's (OSHA) determination of the 
extent to which a workplace complies with regulations and to 
which an employer has made efforts to put the workplace in 
compliance. Enactment of H.R. 2869 would increase the time and 
effort required to determine the extent of compliance. 
According to OSHA authorities, the extent to which access to 
employer self-audit reports aids an investigation cannot be 
measured. Therefore, the costs that OSHA would incur if it no 
longer had access to this information cannot be determined.
    H.R. 2869 would not affect direct spending or receipts; 
therefore pay-as-you-go procedures would not apply. The 
legislation does not contain any intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
and would not affect the budget of state, local, or tribal 
governments.
    The federal cost estimate was prepared by Cyndi Dudzinski, 
the impact of this legislation on state, local, and tribal 
governments was determined by Marc Nicole, and the impact on 
the private sector was determined by Kathryn Rarick. This 
estimate was approved by Paul N. Van de Water, Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

      SECTION 8 OF THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970

             inspections, investigations, and recordkeeping

    Sec. 8. (a) * * *
    (b)(1) In making his inspections and investigations under 
this Act the Secretary may requite the attendance and testimony 
of witnesses and the production of evidence under oath. 
Witnesses shall be paid the same fees and mileage that are paid 
witnesses in the courts of the United States. In case of a 
contumacy, failure, or refusal of any person to obey such an 
order, any district court of the United States or the United 
States courts of any territory or possession, within the 
jurisdiction of which such person is found, or resides or 
transacts business, upon the application by the Secretary, 
shall have jurisdiction to issue to such person an order 
requiring such person to appear to produce evidence if, as, and 
when so ordered, and to give testimony relating to the matter 
under investigation or in question, and any failure to obey 
such order of the court may be punished by said court as a 
contempt thereof. Records reports, or other information 
obtained or prepared in connection with safety and health 
assessments, audits, or reviews conducted by or for the 
employer shall not be required to be disclosed in any 
inspection, investigation, or enforcement proceeding pursuant 
to this Act, except as provided in paragraph (2). Such records, 
reports, or other information may be disclosed in the course of 
an inspection, investigation, or enforcement proceeding to the 
extent that the owner or operator of the facility expressly 
authorizes the disclosure.
    (2) Such records, reports, or other information may be 
required to be disclosed to the extent that--
          (A) the record, report, or information is sought as 
        part of a criminal proceeding; or
          (B) the record, report, or information is sought for 
        purposes of establishing the cause of, or an employer's 
        actual knowledge of, a particular alleged violation, 
        but only if--
                  (i) the Secretary establishes, on evidence 
                independent of such records, reports, or 
                information, that a condition or practice of 
                the employer is not in compliance with the 
                requirements of this Act; and
                  (ii) the employer has not undertaken good 
                faith efforts to address items identified in 
                the assessment, audit, or review, or initiated 
                a process to abate hazards or potential hazards 
                identified in the assessment, audit, or review.
    (3) For purposes of this subsection, the term ``health and 
safety assessments, audits, or reviews'' means an evaluation of 
1 or more processes, operations, or facilities or of a 
management systems related to such processes, operations, or 
facilities that is designed to identify and prevent 
noncompliance with this Act and hazards or potential hazards to 
employees. The records, reports, and information subject to 
paragraph (1) do not include medical records or records of 
employee exposure to potentially toxic materials or harmful 
physical agents, or records of work-related deaths, injuries, 
and illnesses required to be maintained under this section.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    We strongly oppose the H.R. 2869 as reported by Committee. 
H.R. 2869 shields the disclosure in Occupational Safety and 
Health Administration (OSHA) inspections, investigations, or 
enforcement proceedings of any ``records, reports, or other 
information prepared in connection with health and safety 
assessments, audits, or reviews conducted by or for the 
employer,'' unless the record, etc. are required by specific 
OSHA standards. By protecting employers who wish to hide the 
fact that they were aware of health and safety violations, and 
did nothing to correct those violations, this legislation 
seriously and senselessly jeopardizes the safety and health of 
workers.
    We concur with the proponents of H.R. 2869 that employers 
should be encouraged to perform safety and health audits. 
However, while being aware of safety and health violations is, 
of course, a necessary first step, it is a pointless one unless 
the employer also acts to correct those safety and health 
violations. H.R. 2869 not only fails to require, or even 
encourage, employers to correct safety and health violations, 
it effectively rewards employers who fail to do so.
    H.R. 2869 has two major flaws: (1) the information that is 
confidentially privileged by the fill is extremely broad; and 
(2) the confidentiality privilege is extended to situations 
that seriously jeopardize fact finding and enforcement 
proceedings. While the bill privileges almost all information 
collected by the employer related to health and safety, it 
fails to impose any corresponding responsibility upon the 
employer to act on the basis of that information.
    H.R. 2869 extends a privilege to any ``records, reports, or 
other information obtained or prepared in connection with 
safety and health assessments, audits, or reviews conducted by 
or for the employer.'' There is no definition of what 
constitutes an assessment, audit, or review. Therefore, any 
information generated by an employer that is at all related to 
safety and health would appear to be privileged.
    H.R. 2869 also makes it virtually impossible for OSHA to 
prove a willful or criminal violation since any information the 
employer developed that would have shown he or she was aware of 
the hazard is privileged by H.R. 2869. The information remains 
privileged even where the failure of the employer to act on the 
information leads directly to the injury or death of a worker.
    As reported, H.R. 2869 guarantees OSHA access to audit 
information in only two circumstances. The two exceptions to 
the confidentiality privilege, however, are effectively 
meaningless. The amendment provides for disclosure of audits in 
criminal proceedings. However, in order to begin a criminal 
proceeding, OSHA must first show there has been a willful 
violation of the Occupational Safety and Health Act. However, 
virtually any information generated by the employer that would 
show previous knowledge of the OSHA violation and, therefore, 
be relevant to determining whether there was a willful 
violation is, by virtue of H.R. 2869, privileged audit 
information. The exception that provides OSHA access to audit 
information in a criminal proceeding is, therefore, meaningless 
since H.R. 2869 would deny access to the information for 
purposes of establishing a willful violation.
    H.R. 2869 also provides that OSHA may have access to the 
audit information for purposes of establishing the employer's 
actual knowledge of a violation. However, the information is 
only required to be disclosed where the Secretary of Labor 
independently establishes that a violation exists and that the 
employer has not made a good faith effort to address it. The 
audit information would typically be crucial toward determining 
whether or not the employer has made a good faith effort; but, 
once again, at this step the audit information remains 
privileged.
    H.R. 2869 as reported is worse in significant respects than 
that bill as originally introduced. As introduced, H.R. 2869 
specifically provided that safety and health audits required by 
specific OSHA standards would not be privileged. As reported, 
H.R. 2869 denies OSHA access to information employers are 
required by OSHA standards to develop. For example, both OSHA's 
chemical process safety standards and its lock-out tag-out 
standard require employers to perform hazard analyses. H.R. 
2869 denies OSHA access to those hazardous analyses and thereby 
effectively renders the standards unenforceable.
    As reported, H.R. 2869 guts cooperative compliance 
programs. Under these programs, employers must undertake 
initiatives to identify and correct hazards. The information 
developed by the employer is necessarily shared with OSHA to 
ensure compliance. Under this legislation, employers may no 
longer be required to share that information. As a consequence, 
OSHA would have no means of determining whether employers 
participating in cooperative compliance programs are, in fact, 
complying with the Occupational Safety and Health Act.
    Supporters of this bill have repeatedly said that OSHA 
should have an audit program similar to that of the 
Environmental Protection Agency (EPA). Under EPA policy, 
businesses are required to self-report violations identified in 
their audits and are required to take steps to correct those 
violations. Under H.R. 2869, employers are permitted to hide 
the violations they find and OSHA's ability to enforce the law 
is effectively limited.
    H.R. 2869 rewards, rather than sanctions, scofflaws. This 
bill provides no protection at all to a good employer who 
performs a safety and health audit and then acts on that 
information to correct hazards. Under current procedures, OSHA 
already considers such information to be indicative of good 
faith and reduces penalties accordingly. Instead, the 
protection afforded by this bill is to the bad employer who 
performs an audit, is made aware of a hazard, and then refuses 
to do anything about it. In effect, the legislation protects 
willful violations of the Occupational Safety and Health Act 
and, as a practical matter, makes it virtually impossible for 
OSHA to prove willful or criminal violations of the law by 
extending a confidentiality privilege to virtually any evidence 
the agency would otherwise use to establish its case.

                                   William L. Clay.
                                   Dale E. Kildee.
                                   Major R. Owens.
                                   Patsy T. Mink.
                                   Lynn Woolsey.
                                   Chaka Fattah.
                                   Carolyn McCarthy.
                                   Harold E. Ford, Jr.
                                   George Miller.
                                   Matthew G. Martinez.
                                   Donald M. Payne.
                                   Robert E. Andrews.
                                   Robert C. Scott.
                                   Carlos Romero-Barcelo.
                                   Ruben Hinojosa.
                                   John F. Tierney.
                                   Loretta Sanchez.
                                   Dennis J. Kucinich.

                                
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