    Workplace Safety and Health: OSHA's Voluntary Compliance
    Strategies Show Promising Results, but Should be Fully Evaluated
    Before They Are Expanded (19-MAR-04, GAO-04-378).

    Because the Occupational Safety and Health Administration (OSHA)
    can inspect only a fraction of 7 million U.S. worksites each year
    in its efforts to ensure safe and healthy working conditions, the
    agency has increasingly supplemented enforcement with "voluntary
    compliance strategies" to reach more employers and employ its
    resources most effectively. GAO assessed the types of strategies
    used, the extent of their use, and their effectiveness. GAO also
    obtained suggestions from specialists for additional voluntary
    compliance strategies.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-04-378
        ACCNO:   A09507
      TITLE:     Workplace Safety and Health: OSHA's Voluntary Compliance
    Strategies Show Promising Results, but Should be Fully Evaluated
    Before They Are Expanded
         DATE:   03/19/2004
      SUBJECT:   Occupational health and safety programs
    	     Occupational safety
    	     Program evaluation
    	     Safety regulation
    	     State-administered programs
    	     Strategic planning
    	     Voluntary compliance
    	     Georgia
    	     Illinois
    	     Massachusetts
    	     OSHA Alliance Program
    	     OSHA State Consultation Program
    	     OSHA Strategic Partnership Program
    	     OSHA Voluntary Protection Program

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    GAO-04-378

    United States General Accounting Office

    GAO	Report to the Chairman, Subcommittee on Workforce Protections, Committee on
                 Education and the Workforce, House of Representatives

    March 2004

    WORKPLACE SAFETY AND HEALTH

      OSHA's Voluntary Compliance Strategies Show Promising Results, but Should Be
                        Fully Evaluated before They Are Expanded

    GAO-04-378

    Highlights of GAO-04-378, a report to the Chairman, Subcommittee on
    Workforce Protections, Committee on Education and the Workforce, House of
    Representatives

    Because the Occupational Safety and Health Administration (OSHA) can
    inspect only a fraction of 7 million U.S. worksites each year in its
    efforts to ensure safe and healthy working conditions, the agency has
    increasingly supplemented enforcement with "voluntary compliance
    strategies" to reach more employers and employ its resources most
    effectively. GAO assessed the types of strategies used, the extent of
    their use, and their effectiveness. GAO also obtained suggestions from
    specialists for additional voluntary compliance strategies.

    To strengthen OSHA's use of its voluntary compliance strategies, GAO
    recommends that the Secretary of Labor direct the Assistant Secretary for
    Occupational Safety and Health to (1) identify cost-effective methods of
    assessing the effectiveness of OSHA's voluntary compliance programs and
    (2) develop a strategic framework that articulates the priorities and
    resource allocations for the agency's voluntary compliance programs before
    further expanding the use of these strategies.

    In its written comments on the draft report, OSHA generally agreed with
    our findings, conclusions, and recommendations.

    March 2004

    WORKPLACE SAFETY AND HEALTH

    OSHA's Voluntary Compliance Strategies Show Promising Results, but Should Be
    Fully Evaluated before They Are Expanded

    OSHA has implemented four voluntary programs, using a mix of strategies,
    that have extended its reach to a growing number of employers. For
    example, one program recognizes more than 1,000 worksites with exemplary
    records and practices while another focuses on hazardous industries,
    encouraging more than 200 employers to eliminate serious hazards. The
    agency plans to significantly expand its voluntary compliance programs
    over the next few years, although such expansion may tax its limited
    resources.

    OSHA's voluntary compliance programs appear to have yielded many positive
    outcomes, but the agency does not yet have adequate data to assess their
    individual and relative effectiveness. Employers and employees at nine
    worksites we visited attested to reductions in injuries and illnesses and
    improved relationships with one another and with OSHA. However, the agency
    has just begun to evaluate its programs and much of its data are
    insufficient for evaluation. For example, data on one program are
    inconsistent, making comparisons difficult, and goals for another program
    are individually developed and not readily measurable. The lack of such
    data makes it difficult for OSHA to articulate priorities and necessary
    resource allocations. The additional strategies that researchers and
    specialists suggested generally fell into four categories: providing more
    incentives to encourage additional employers to voluntarily improve
    workplace safety and health; promoting more systematic approaches to
    workplace safety and health; focusing more specifically on high-hazard,
    high-injury workplaces; and using third-party approaches to achieve
    voluntary compliance.

    Growth in Voluntary Compliance Programs, 1993 to 2003

    Number of worksites, partnerships, or programs 1,200 1,000

    800

    600

    400 200

    0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

    Worksites with exemplary safety and health programs in Voluntary
    Protection Programs

    Small business worksites recognized by state programs for having exemplary
    safety and health programs (Data only available for states under federal
    OSHA authority from 1998 on)

    Strategic partnership agreements addressing specific industry problems at
    multiple worksites

    Alliance agreements primarily with trade or professional organizations to
    conduct training and outreach-related activities

                                     Source: OSHA.

    www.gao.gov/cgi-bin/getrpt?GAO-04-378.

    To view the full product, including the scope and methodology, click on
    the link above. For more information, contact Bob Robertson at (202)
    512-7215 or robertsonr@gao.gov.

    Contents

      Letter

    Results in Brief
    Background
    OSHA Has Employed a Variety of Voluntary Compliance Strategies,

    Which Has Extended the Agency's Reach to a Growing Number of Employers
    Voluntary Strategies Appear to Have Many Positive Outcomes, but the
    Absence of Comprehensive Data Limits Assessment Researchers and Other
    Specialists Suggested a Variety of

    Additional Voluntary Compliance Strategies Conclusions Recommendations for
    Executive Action Agency Comments

                                           1

                                          2 4

                                           7

    25

    33 43 43 44

         Appendix I        Comments from the Occupational Safety and Health
                                          Administration                       46
                                           GAO Comments                        48
         Appendix II          GAO Contacts and Staff Acknowledgments           49
                                           GAO Contacts                        49
                                      Staff Acknowledgments                    49

    Tables
                 Table 1: Summary of OSHA's Four Voluntary Compliance Programs  8
                     Table 2: Additional Voluntary Compliance Strategies       34
    Figures
                            Figure 1: Example of a SHARP Worksite              10
                      Figure 2: Federal and State-Plan State VPP Worksites, by 11
                                                                      Industry
                    Figure 3: Federal VPP Worksites, by Size of Employer       12
                             Figure 4: Example of a VPP Worksite               13
                        Figure 5: Example of a Strategic Partnership           15
                      Figure 6: Strategic Partnership Programs in Federal OSHA
                                                                       States,
                               by Industry or Area of Emphasis                 16
                              Figure 7: Example of an Alliance                 18
               Figure 8: Growth in Voluntary Compliance Programs, 1993 to 2003 20

    Figure 9: Use of OSHA's Budget for Fiscal Years 1996 to 2003, by Program
    22

    Figure 10: Links between Occupational Safety and Health and Workers'
    Compensation Programs in Oregon and California 36

    Abbreviations

    OSH Occupational Safety and Health
    OSHA Occupational Safety and Health Administration
    SAFE Act Safety Advancement for Employees Act of 1999
    SHARP Safety and Health Achievement Recognition Program
    VPP Voluntary Protection Programs

    This is a work of the U.S. government and is not subject to copyright
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    separately.

    United States General Accounting Office Washington, DC 20548

    March 19, 2004

    The Honorable Charles Norwood
    Chairman, Subcommittee on Workforce Protections
    Committee on Education and the Workforce
    House of Representatives

    Dear Mr. Chairman:

    Workplace injuries and illnesses affect millions of workers each year,
    often changing their lives and reducing employers' profitability through
    higher costs and lowered productivity. Ensuring safe and healthy
    conditions at the 7 million U.S. worksites that employ 114 million workers
    is the responsibility of the Occupational Safety and Health Administration
    (OSHA). The agency's enforcement program-primarily conducting
    inspections of employers' worksites-has been the foundation of its
    efforts to ensure compliance with federal laws and regulations. However,
    OSHA can only inspect a small fraction of all worksites each year. In
    2002,
    for example, the agency and its state counterparts conducted almost
    96,000 inspections. Furthermore, the growth in the number of worksites
    over time, as well as changes in the workplace, have added to OSHA's
    challenge. To help meet its responsibilities, the agency has increasingly
    supplemented its enforcement efforts with "voluntary compliance
    strategies." These are initiatives in which OSHA invites employers to work
    cooperatively with the agency to protect the safety and health of workers.
    While in the past enforcement has been the agency's predominant
    approach to achieving its mission, voluntary strategies may provide
    important opportunities to extend the agency's influence.

    Given the desirability of reaching additional employers and employing
    OSHA's resources most effectively, you asked us to provide you with
    information on (1) the types of voluntary compliance strategies OSHA uses
    to improve workplace safety and health and the extent to which it reaches
    employers through these strategies, (2) the effectiveness of these
    voluntary compliance strategies, and (3) additional strategies that could
    further OSHA's mission to protect the safety and health of workers. We
    focused our review on OSHA's four voluntary compliance programs: the

    Voluntary Protection Programs (VPP), the State Consultation Program, the
    Strategic Partnership Program, and the Alliance Program.1

    To address these objectives, we reviewed the agency's strategic management
    plan as it relates to these voluntary compliance programs; analyzed
    budgetary, participant, and other data on program trends; and reviewed the
    policies and procedures for each program, including data reporting
    requirements. We reviewed evaluations of OSHA's voluntary compliance
    programs as well as published research about these programs. In addition,
    we obtained information about each program from officials at OSHA
    headquarters and selected regional and area offices. To further our
    understanding of the Alliance Program, we interviewed representatives from
    several trade and professional organizations that participate in the
    program. To further our understanding of the other three programs, we
    visited participants in three geographically dispersed federal OSHA states
    that represented different OSHA regions: Georgia, Illinois, and
    Massachusetts. In each state, we visited three employers-one that
    participated in the VPP, one in the State Consultation Program, and one in
    the Strategic Partnership Program. At each of these employers, we
    interviewed management and members of the safety committee and conducted a
    focus group of employees not directly involved with safety and health
    issues. Finally, we interviewed a broad range of researchers and
    specialists from universities, professional and trade associations,
    employee and employer organizations, and consulting firms about the
    implementation and effectiveness of OSHA's voluntary compliance strategies
    and analyzed their suggestions for additional strategies for voluntary
    compliance. We conducted our work in accordance with generally accepted
    government auditing standards between March 2003 and February 2004.

    OSHA has implemented its voluntary compliance strategies through four
    programs, and compliance assistance activities, that have extended its
    reach to a growing number of employers. While worksites directly involved
    in these programs represent a small fraction of the 7 million sites over
    which OSHA has authority, their numbers suggest an expansion in the number
    of employers the agency is able to reach through enforcement.

    1The State Consultation and the Strategic Partnership programs are
    sometimes referred to by slightly different names. The State Consultation
    Program is also known as the Onsite Consultation Program and the
    Consultation Program and the Strategic Partnership Program is also known
    as OSHA Strategic Partnerships for Worker Safety and Health.

      Results in Brief

    OSHA's four voluntary compliance programs have involved employers both
    directly and indirectly through trade and professional associations. These
    programs represent a mix of strategies designed to reach different types
    of employers, including those that recognize employers with exemplary
    safety and health practices and programs designed to address serious
    hazards in workplaces. The State Consultation Program-a state-run, but
    largely OSHA-funded, program-provides consultations, usually
    confidentially, to small businesses in high-hazard industries and exempts
    worksites that meet certain standards from routine inspections. Almost
    29,000 consultation visits were made in 2003 as a part of this program.
    The VPP recognizes employers with exemplary safety records and practices
    by exempting them from routine inspections. The VPP has grown
    substantially over the past decade and currently includes over 1,000
    worksites. The Strategic Partnership Program encourages employers in
    hazardous industries to develop measures for eliminating serious hazards.
    To date, there are more than 200 partnerships. In the Alliance Program,
    OSHA has collaborated with more than 160 organizations, such as trade and
    professional associations, to promote better safety and health practices
    for their members. To support all of its voluntary compliance strategies,
    OSHA has increased the proportion of resources dedicated to them from
    about 20 percent of its total budget in fiscal year 1996 to about 28
    percent in 2003. The agency also plans to expand its voluntary compliance
    programs in the future, although national and regional OSHA officials we
    interviewed acknowledged that doing so would be difficult given the
    agency's current resources. For example, OSHA plans an eight-fold increase
    in the number of worksites for the VPP, from 1,000 to 8,000.

    OSHA's voluntary compliance programs have reduced injuries and illnesses
    and yielded other benefits, according to participants, OSHA officials, and
    occupational safety and health specialists, but the lack of comprehensive
    data makes it difficult to fully assess the effectiveness of these
    programs. Participants we interviewed in the three states and nine
    worksites we visited told us they have considerably reduced their rates of
    injury and illness. They also attributed better working relationships with
    OSHA, improved productivity, and decreased worker compensation costs to
    their involvement in the voluntary compliance programs. However, much of
    the information on program success was anecdotal, and OSHA's own
    evaluation of program activities and impact has been limited to date. OSHA
    currently does not collect complete, comparable data that would enable a
    full evaluation of the effectiveness of its voluntary compliance programs.
    For example, OSHA requires participants in the Strategic Partnership
    Program to file annual reports but does not collect consistent information
    about each partnership. The agency has begun planning but

    has yet to develop performance measures to use in evaluating the programs
    and a strategic framework that will allow it to set priorities and
    effectively allocate its resources.

    Researchers, safety and health practitioners, and other specialists we
    interviewed suggested additional strategies for protecting the safety and
    health of workers, some of which might require legislative changes. Some
    might help OSHA leverage its existing resources; others could require
    additional resources to implement. In broad terms, these strategies would
    (1) provide incentives designed to encourage more employers to voluntarily
    improve safety and health in the workplace; (2) promote more systematic
    approaches to workplace safety and health; (3) focus more of OSHA's
    voluntary efforts on high-hazard, high-injury workplaces; and (4) use
    third-party approaches to conduct safety and health evaluations or develop
    voluntary safety and health standards. While these strategies were offered
    as being potentially useful, the specialists also acknowledged that some
    could necessitate additional safeguards, oversight, and enforcement. For
    example, using financial incentives such as tax credits could encourage
    employers to make safety and health improvements, but they could also
    entail lost tax revenue and "improvements" whose safety or health outcomes
    are difficult to substantiate. Furthermore, in its efforts to implement
    similar strategies in the past, OSHA experienced regulatory and legal
    challenges that would have to be considered carefully in implementing some
    of these strategies.

    We are recommending that the Secretary of Labor direct the Assistant
    Secretary for Occupational Safety and Health to strengthen OSHA's
    voluntary compliance strategies by identifying cost-effective ways of
    obtaining data for evaluation and by developing a strategic framework that
    sets priorities and identifies resource allocations among these programs,
    before further expanding them. We are not making recommendations on any
    strategies proposed by researchers and specialists we interviewed.

    In its written comments on our draft report, OSHA generally agreed with
    our findings, conclusions, and recommendations. In addition, we received
    technical comments from OSHA officials, which we incorporated in the
    report as appropriate.

    Background 	Congress passed the Occupational Safety and Health (OSH) Act
    in 1970 to ensure safe and healthy working conditions for every worker in
    the nation. OSHA has responsibility for enforcing the provisions of the
    act, including overseeing most worksites, with the exception of some small
    employers in

    low-hazard industries and small farming operations. OSHA has direct
    enforcement responsibility for about half the states; the remainder have
    been granted authority for their own enforcement. At present, 22 states
    have been approved by OSHA to operate their own programs covering all
    worksites; 4 are approved for covering public sector employee worksites
    only; and OSHA directly oversees all worksites in the remaining states.2

    OSHA uses two approaches to ensure compliance with federal safety and
    health laws and regulations-enforcement and voluntary compliance.
    Enforcement, which represents the preponderance of agency activity, is
    carried out primarily by using compliance officers to inspect employer
    worksites. Worksites and employers whose conditions fail to meet federal
    safety and health standards face sanctions, such as paying penalties for
    violations of health and safety standards. In this enforcement capacity,
    OSHA targets employers for inspection using injury and illness rates for
    industries and specific worksites. For example, it has targeted the
    construction industry for inspections because of high injury and illness
    rates. OSHA also conducts inspections when employers report fatalities or
    serious injuries and when workers file complaints about serious safety and
    health hazards. The voluntary compliance approach, in contrast, invites
    employers to collaborate with the agency and uses a variety of incentives
    to encourage them to reduce hazards and institute practices that will
    foster safer and healthier working conditions. Such incentives include
    free consultations, exemption from routine inspections, and recognition
    for exemplary safety and health systems.

    To participate in voluntary compliance programs, employers must also meet
    certain requirements, which often include the adoption of some form of
    safety and health management program-a program that takes a systems
    approach to preventing and controlling workplace hazards.3 OSHA has four
    basic requirements for a safety and health management program:

    (1) Management Leadership and Employee Involvement-Top-level management
    must be committed to carrying out written comprehensive

    2States that are granted authority for their own enforcement are referred
    to as "state-plan states." Under the OSH Act, "state" is defined to
    include the District of Columbia, Puerto Rico, the Virgin Islands,
    American Samoa, Guam, and the Trust Territory of the Pacific Islands. See
    29 U.S.C. S:652(7).

    3OSHA established guidelines for voluntary safety and health programs in
    1989.

    safety and health programs. Employees must be actively involved in the
    execution of the program.

    (2) Worksite Analysis-Employers must have a thorough understanding of all
    hazardous situations to which employees may be exposed, as well as the
    ability to recognize and correct these hazards.

    (3) Hazard Prevention and Controls-The program must have clear procedures
    for preventing and controlling hazards identified through worksite
    analysis, such as a hazard tracking system and a written system for
    monitoring and maintaining workplace equipment.

    (4) Safety and Health Training-Training is necessary to reinforce and
    complement management's commitment to safety and health and to ensure that
    all employees understand how to avoid exposure to hazards.

    To keep pace with the increasing demands on OSHA staff to help administer
    and promote voluntary compliance programs, in 2001 OSHA created the new
    position of "compliance assistance specialist." According to OSHA
    officials, funding for this position was authorized in fiscal year 2002.
    Compliance assistance specialists provide general information about OSHA
    standards and promote voluntary compliance programs, as well as OSHA's
    compliance assistance resources, such as training and Web site resources.
    They also respond to requests for help from a variety of groups and
    participate in numerous seminars, workshops, and speaking events. Most
    specialists are former OSHA compliance officers who conducted inspections
    of employers' worksites. In their new positions, the specialists are not
    involved in OSHA's enforcement activities. There is one Compliance
    Assistant Specialist position in each OSHA area office in states under
    federal jurisdiction, with a total of 65 in fiscal year 2003.

    OSHA's strategic management plan identifies particular safety and health
    problems and industries on which to focus the agency's efforts. In its
    current 5-year plan for years 2003 through 2008, one of the agency's three
    goals is to promote a safety and health culture through compliance
    assistance, cooperative programs, and strong leadership. This goal
    includes increasing the number of participants in voluntary compliance
    programs and improving the programs' effectiveness. Another goal is to
    reduce occupational hazards by, for example, reducing the rate of
    workplace injuries and illnesses by 5 percent annually. OSHA's third goal
    focuses on strengthening the agency's capabilities and infrastructure,
    including improving the agency's access to accurate, timely data, and
    enhancing its measures for assessing the effectiveness of its programs.

      OSHA Has Employed a Variety of Voluntary Compliance Strategies, Which Has
      Extended the Agency's Reach to a Growing Number of Employers

    OSHA's voluntary compliance strategies-four programs plus compliance
    assistance activities such as education and outreach-have expanded the
    agency's reach to a growing number of employers. The agency's four
    programs reach a range of employers and use a mix of strategies. They
    target both exemplary worksites and hazardous ones, and they influence
    employers directly by implementing safety and health programs and
    indirectly through collaboration with trade and professional associations.
    Some programs offer employers incentives to participate, such as a reduced
    chance of on-site inspection or special recognition for safety and health
    programs. Two of the programs were officially introduced in the last
    decade, adding to the number of participants engaged in voluntary
    compliance. OSHA plans to dramatically increase the number of employers
    and organizations participating in voluntary compliance programs. However,
    OSHA officials expressed concerns that such plans for expansion could tax
    the agency's limited resources.

        Voluntary Compliance Programs Are Designed to Reach a Range of Employers

    OSHA's voluntary compliance programs have been implemented incrementally
    to reach different employers and worksites in various ways. They represent
    a mix of strategies to help improve workplace conditions (see table 1).4

    4The VPP and Strategic Partnership programs discussed in this report
    primarily apply to states directly under OSHA authority, known as federal
    OSHA states. These programs have also been implemented in some state-plan
    states, although their requirements may vary from those in federal OSHA
    states. In state-plan states, program safety and health standards, and the
    enforcement of such standards, must be at least as effective as federal
    OSHA programs. See 29 U.S.C. S:667(C)(2).

             Table 1: Summary of OSHA's Four Voluntary Compliance Programs

      techniques. Voluntary Protection Single worksites typically with Recognizes
                                  worksites that have

    Programs 1982

    injury and illness rates below average for their industry sector.

    safety and health programs with specific features that exceed OSHA
    standards.

    Employers must pass a weeklong on-site worksite review by OSHA personnel.

    Participants complete yearly self-evaluations.

    OSHA recertifies worksites every 1 to 5 years.

        Strategic      Priority for    Flexible agreements     OSHA conducts
    Partnership   participation is  between                  verification
                          given
         Programa      to groups of    OSHA and partners   inspections for a
                      employers and    to address          percentage of
                       employees in                        partner worksites to
           1998        high-hazard      a specific safety  ensure compliance with
                    workplaces, with a and health problem. the partnership
                         focus on
                    employers working
                       at multiple                               agreement.
                        worksites.
         Alliance       Trade and      Agreements with      OSHA meets quarterly
         Program       professional    organizations                with
                      organizations,   that focus on       participants to ensure
           2002      employers, labor  training, outreach,        progress toward
                         unions,       and promoting the        alliance goals is
                       governmental    consciousness                   being met.
                                          of safety and
                      organizations.     health issues.

    Source: GAO analysis.

    aWhile OSHA had partnership agreements prior to 1998, the Strategic
    Partnership Program was not formalized until that year.

    In addition to these formal programs, OSHA conducts other compliance
    assistance activities, such as outreach and training activities, to aid
    employers in complying with OSHA standards and to educate employers on
    what constitutes a safe and healthy work environment.

    State Consultation Program	The State Consultation Program, begun in 1975,
    operates in every state. Its primary focus is to help small businesses
    employed in high-hazard industries comply with OSHA standards and address
    their methods for dealing with worksite safety.5 The agency funds all
    state governments to carry out the program. In fiscal year 2003, OSHA
    provided $53 million to state governments. States provide free
    consultation visits at employers' requests to identify safety and health
    hazards and discuss techniques for

    5The State Consultation Program defines a small business as one with fewer
    than 250 workers at the workplace where the consultation is conducted and
    no more than 500 workers companywide.

    their abatement. In fiscal year 2003, state agents conducted about 28,900
    consultation visits. 6 The names of employers receiving consultation
    visits are kept confidential and separate from OSHA enforcement
    officials.7 Depending on an employer's request, a state consultant may
    conduct a full safety and health hazard assessment of all working
    conditions, equipment, and processes at the worksite, or he or she may
    focus solely on one particular hazard or work process. Employers receive a
    detailed written report of the consultation findings and agree upon a time
    frame for eliminating the hazards.

    Small employers receiving consultation visits may qualify for recognition
    in the Safety and Health Achievement Recognition Program (SHARP), which
    exempts them from general, scheduled inspections for 1 or 2 years as
    models for good safety and health practices.8 Participants in SHARP must
    have safety and health programs, which are management programs, in place
    to prevent and control occupational hazards. In fiscal year 2003, there
    were 699 SHARP worksites in both federal OSHA states and state-plan
    states. Although SHARP worksites are exempt from scheduled inspections,
    they are still subject to inspections resulting from employee complaints
    and other serious safety and health problems, such as fatalities.

    6Program data for the State Consultation Programs in this report refer to
    the states operating State Consultation Programs under section 21(d) of
    the OSH Act of 1970 (29 U.S.C. 670(d)). These include 48 states, the
    District of Columbia, Guam, the Northern Marianas, and the Virgin Islands.
    Kentucky, Washington, and Puerto Rico operate consultation programs under
    other authority.

    7Consultation visits are not kept confidential in situations where
    imminent danger or serious hazards are not corrected as agreed upon or
    where the employer participates in state's inspection deferral or
    recognition and exemption program.

    8Each state operating a State Consultation Program under section 21(d) of
    the OSH Act must operate a recognition and exemption program, but programs
    operating in state-plan states may use program names other than SHARP.

                         Figure 1: Example of a SHARP Worksite

    We visited a SHARP worksite that employed approximately 40 workers
    involved in the manufacture of equipment and facilities used to produce
    hydrogen. The facility's impetus for joining SHARP was a push from new
    corporate management that saw the facility's safety processes as not
    adequate. Additionally, management at the facility was increasingly
    recognizing that their clients were interested in their safety records and
    that it was an important means of attracting new work. Since joining the
    program, the company has undergone significant changes in its safety and
    health procedures and has made significant improvements to the facility.
    For example, the facility installed an expensive sprinkler system in a new
    building on the worksite that was not required by the fire department
    because of a suggestion made by a state consultant. Although the
    facility's management did not think the building posed a safety threat to
    workers, the SHARP status meant enough to them that they chose to install
    the expensive system. Employees at the facility commented that the SHARP
    status is a source of pride for them and that employees remind each other
    about the importance of safety issues.

                             Voluntary Protection Programs

    Source: GAO analysis.

    The Voluntary Protection Programs, established in 1982, are designed to
    recognize single worksites with exemplary safety and health programs. As
    of September 30, 2003, there were a total of 1,024 VPP worksites in both
    federal OSHA and state-plan states.9 The manufacturing and chemical
    industries comprise 21 percent and 20 percent of these recognized
    worksites, respectively (see fig. 2).

    9As of February 29, 2004, the number of VPP worksites in both federal OSHA
    and state-plan states had increased to 1,053 worksites.

           Figure 2: Federal and State-plan State VPP Worksites, by Industry

    Percent

                                           21

    0

    ehouserWaand storage

    Refineries PlasticsFood products Utilities ServicesConstruction tiles Otheraper
                                        products

    ood products W

    gChemicalManufacturin

    xTe

                                           P

    Source: OSHA.

    The majority of VPP worksites in federal OSHA states have more than 200
    employees (see fig. 3). While the VPP does not specifically target large
    businesses, they tend to be the businesses that attain VPP status.
    According to an OSHA official, this trend is due to the fact that large
    businesses tend to have staff and expertise available for a comprehensive
    safety and health program.

    Figure 3: Federal VPP Worksites, by Size of Employer

    To participate in VPP, employers must have worksites that exceed OSHA
    standards and they must commit to a process of continual improvement.
    Employers achieving all VPP requirements are designated as Star VPP
    worksites, which signifies the highest level of workplace safety and
    health.10 As of September 30, 2003, 92 percent of all VPP worksites in
    federal OSHA states have Star designation.11 To be eligible for this
    exemplary status, employers must meet a number of specific requirements
    for their worksite: (1) worksite injury and illness rates must be below
    the average rate for their industry sector for at least 1 of the 3 most
    recent years; (2) a safety and health program must have been implemented
    and

    10VPP programs in state-plan states are not required to have the same
    requirements as the federal VPP.

    11This percentage refers only to VPP worksites in federal OSHA states. The
    remaining

    8 percent of VPP sites are designated as Merit (7 percent) or
    Demonstration (1 percent). Merit worksites have not achieved all the
    necessary requirements for Star by the time of the on-site review, but
    have demonstrated the potential and willingness to achieve the Star
    designation. Demonstration worksites are worksites with safety and health
    programs that meet VPP Star requirements, but they test alternative ways
    to achieve safety and health excellence that may differ from these
    requirements. Demonstration worksites may lead to changes in VPP Star
    criteria.

    maintained for at least 1 year; and (3) worksites must undergo and pass a
    comprehensive review by OSHA personnel, including an on-site review of the
    facility and interviews with management officials and employees. In
    exchange for OSHA recognition, VPP worksites are exempt from scheduled
    enforcement inspections. However, VPP worksites are still subject to
    inspections resulting from employee complaints and other significant
    events, such as fatalities.

                          Figure 4: Example of a VPP Worksite

    At a food processing VPP Star worksite we visited, management credited the
    VPP with reducing employee injuries, helping to decrease workers'
    compensation premiums by more than $200,000, and creating more trust
    between employees and management. The facility has been part of VPP for
    over 4 years and has implemented a safety and health program to alleviate
    and control workplace hazards. Management acknowledged employee
    involvement as the key to their successful program. Employees participate
    in a number of safety and health committees and meet weekly to discuss
    issues that surface regarding safety and health. Additionally, employees
    conduct safety and health training courses for other employees and
    participate in tours of other facilities to acquire new ideas for
    improving safety and health practices at their worksite. An employee we
    spoke with said that there have been major changes in employees' and
    management's attitudes about safety and health since the facility has been
    part of the VPP program and another employee noted that safety now
    encompasses almost all aspects of his job.

    Source: GAO analysis.

    To attract additional VPP worksites and expand the overall program, OSHA
    has recently announced three new VPP initiatives:

    o  	VPP Challenge: a program that will serve as a roadmap to help
    employers, particularly small employers, achieve VPP status regardless of
    their current level of safety and health.

    o  	VPP Corporate: a program that offers a more streamlined application
    process for corporations that already have worksites in VPP and want to
    bring additional worksites into the program.

    o  	VPP Construction: a program that builds on information learned at
    previous VPP demonstration worksites and is designed to make it easier for
    construction worksites, particularly temporary worksites, to apply for and
    attain VPP status by, for example, reducing the amount of time that safety
    and health improvements must be in place.12

    12OSHA plans to pilot both the VPP Challenge and VPP Corporate programs
    for at least 1 year before formally implementing them. The VPP
    Construction program is expected to be implemented in fiscal year 2005,
    according to an OSHA official.

    Strategic Partnership Program

    The Strategic Partnership Program, formalized in 1998, is designed to help
    groups of employers and employees working at multiple worksites in
    high-hazard workplaces to address a specific safety and health problem. As
    of September 2003, 66 percent of partnerships are construction-related. A
    partnership agreement sets goals, such as the reduction of injuries,
    specifies a plan for achieving them, and provides procedures for verifying
    their completion. Some partnership agreements may also require the
    development of a safety and health management program and the involvement
    of employees in carrying out the partnership agreement. The program does
    not offer exemption from enforcement inspections but does offer other
    incentives. These include limiting scheduled inspections on only the most
    serious prevailing hazards, penalty reductions for any hazards cited
    during an inspection, and priority consideration for the State
    Consultation Program.

                      Figure 5: Example of a Strategic Partnership

    A collection of roofing contractors we visited formed a Strategic
    Partnership with four OSHA area offices to address hazards in the roofing
    industry. A partner told us that the partnership improved communication
    between OSHA and the contractors and allowed them to develop a mutually
    agreeable solution to a safety and health problem. He noted an example of
    a kettle used to melt roofing materials that was located on the roof of a
    high-rise building that caused a fire. As a result of this accident, OSHA
    prohibited roofing companies from using kettles on roofs to melt roofing
    materials. The roofers told OSHA that they needed to use these kettles on
    high-rise buildings to perform their jobs and used the Strategic
    Partnership as a vehicle to discuss their concerns with OSHA. As a result
    of these discussions, OSHA and the roofers developed a 10-step plan that
    allows roofers to put kettles on roofs with some new safety precautions. A
    partner commented that they intend to continue to use the Strategic
    Partnership as a way to work collaboratively with OSHA to address future
    concerns that arise.

    Source: GAO analysis.

    Partnerships can be developed on an area, regional, or national basis.
    When a national partnership is established, it must be implemented in all
    area and regional OSHA offices where a partner has a worksite. For
    example, the Associated Builders and Contractors created a national
    Strategic Partnership with OSHA that was implemented at the local level
    between the association's chapters and area and regional OSHA offices. As
    of September 2003, there were 205 operating Strategic Partnerships in
    federal OSHA states, about 87 percent of which represented industries or
    areas of emphasis in OSHA's Strategic Management Plan (see fig. 6).13

    13As of February 29, 2004, the number of partnerships had increased to
    215.

                                    Alliance Program

    Figure 6: Strategic Partnership Programs in Federal OSHA States, by
    Industry or Area of Emphasis

    OSHA officials attributed the fact that so many partnerships are
    construction-related to the national partnership with the Associated
    Builders and Contractors. This partnership provided a template from which
    other construction partnerships were developed. Additionally, OSHA
    officials informed us that, because it was originally difficult for
    construction worksites to enter into VPP, employers in the industry who
    wanted to enter into a voluntary compliance program with OSHA had tended
    to form a strategic partnership. While a few strategic partnerships are
    very large, most participating worksites are small businesses with 50 or
    fewer employees.

    The Alliance Program targets trade, professional, and other types of
    organizations to work collaboratively with OSHA to promote workplace
    safety and health issues.14 Alliances can be formed through national or

    14A trade association is an organization made up of individuals and
    employers in the same industry (e.g., construction, textiles,
    shipbuilding), whereas a professional association is made up of a number
    of practitioners employed in a given profession (e.g., safety engineers,
    industrial hygienists). Educational institutions, businesses, labor
    organizations, and government agencies may also join the Alliance Program.

    regional offices. As of September 2003, approximately 51 percent of OSHA's
    national alliances were with trade associations and 38 percent were with
    professional associations.15 The Alliance Program, which included 100
    alliances as of September 2003, is one of OSHA's newest and least
    structured voluntary compliance programs. In contrast to the other three
    voluntary compliance programs which typically include safety and health
    programs at specific employer worksites, alliance agreements focus on
    goals such as training, outreach, and increasing awareness of workplace
    safety and health issues. To date, alliances have participated in a
    variety of activities, such as (1) creating electronic informational tools
    that have been posted on the OSHA Web site, (2) developing
    industry-specific voluntary guidelines and training materials, and (3)
    improving OSHA's training courses. Alliance members are not exempt from
    OSHA inspections and do not receive any enforcement-related incentives for
    joining an alliance. Instead, OSHA officials informed us that trade and
    professional associations have used the Alliance Program as a proactive
    method of addressing existing and emerging workplace safety and health
    issues, such as ergonomic issues. As of September 2003, 41 percent of
    OSHA's national alliances were ergonomic-related. See figure 7 for an
    example of an ergonomic-related alliance.

    15As of February 29, 2004, there were a total of 167 alliances-53 national
    alliances and 114 regional. Of the 53 national alliances, 60 percent were
    with trade organizations, 20 percent with professional organizations, and
    20 percent with other organizations, including individual employers and
    academic institutions, according to agency officials.

                            Figure 7: Example of an Alliance

    Thirteen different national airlines came together to form an alliance
    with OSHA to address the ergonomic issues related to baggage handling. A
    representative of the alliance that we spoke with commented that he saw
    the alliance as a tool for addressing long-term concerns of the industry,
    such as, poorly designed airports that lead to ergonomic injuries for
    employees. He also noted that the airlines believe that by working
    together it sends a stronger message to airport owners for improved
    workspaces that will not injure employees. The alliance also has
    accomplished some shorter-term goals. For example, in September 2003, the
    alliance revised an electronic information tool on the OSHA Web page that
    educates airline employees on how to avoid hazards in handling baggage.
    The tool uses graphics to provide employees with visual training examples
    of how to properly lift baggage to avoid injury. Other airlines that are
    not involved with the alliance have expressed an interest in either
    joining the alliance or learning more about it.

    Other Voluntary Compliance Efforts

    Source: GAO analysis.

    In addition to its voluntary compliance programs, OSHA conducts numerous
    training and outreach activities on a variety of safety and health issues.
    These activities augment both the voluntary compliance programs and OSHA's
    enforcement program, according to OSHA officials. For example, outreach
    activities can be conducted in relation to inspections, in an attempt to
    help employers ready themselves for an inspection. The OSHA Training
    Institute offers 80 courses on a range of safety and health issues, most
    of which are available to the public as well as to OSHA employees for
    training. In fiscal year 2003, however, the majority of its almost 5,000
    students were OSHA employees. In addition to the Training Institute, OSHA
    has 33 Education Centers, nonprofit organizations (mostly universities),
    which have agreements with OSHA to teach 16 of the most popular Training
    Institute courses. An agency official told us that using these Education
    Centers around the country has allowed OSHA to greatly expand the amount
    of nonagency personnel who receive training in safety and health issues.
    In fiscal year 2003, these centers trained almost 16,000 students,
    approximately 98 percent of whom were non-OSHA personnel. Through a grant
    program, the agency also distributes some funds to nonprofit organizations
    to develop training or educational programs about safety and health issues
    of current emphasis in OSHA's Strategic Management Plan.16 In fiscal year
    2003, OSHA funded 67 such training grants totaling over $11 million.

    16These grants, titled the Susan Harwood Training Grant Program, provide
    funds on a competitive basis to nonprofit organizations to educate workers
    and employers in small businesses and provide training on new OSHA
    standards and on hazards identified in OSHA's Strategic Management Plan or
    in special emphasis programs.

    The agency provides outreach to employers and workers in a number of other
    ways, such as through newsletters, brochures, compact discs, speeches, and
    conferences. OSHA also mails materials on specific safety and health
    issues to target audiences. Regional officials we spoke with said that
    several OSHA staff are called upon to conduct outreach efforts because it
    requires specialized skills and knowledge of standards. OSHA also works in
    cooperation the U.S. Small Business Administration's Small Business
    Development Centers.17 Additionally, OSHA recently revised its Web site,
    which provides informational tools and referrals on a variety of safety
    and health issues. For example, OSHA has a Web service entitled "eTools,"
    which offers detailed graphics about specific worksite hazards, how to
    remedy them, and how OSHA regulations apply to worksites.

        Participation in Voluntary Compliance Has Grown in the Past Decade, and OSHA
        Plans Dramatic Increases

    While voluntary compliance strategies directly reach relatively few of the
    nation's employers, participant numbers have grown since 1998 with the
    build-up of programs. Also, in the last decade, most of the programs have
    experienced tremendous growth in the number of employers and organizations
    that participate.18 For example, the VPP has increased from 122 worksites
    in 1993 to 1,024 worksites in 2003, an increase of 739 percent, and the
    Strategic Partnership Program grew from 39 partnerships in 1998 to 205
    existing partnerships in 2003, a 426 percent increase.19 (See fig. 8.)

    17These centers, funded partially by the U.S. Small Business
    Administration, are located throughout the country and provide counseling,
    training, and technical assistance to assist current or potential small
    businesses.

    18According to OSHA officials, the agency's budget for the State
    Consultation Program limits the extent to which it can expand the number
    of consultation visits conducted.

    19The number of students trained by OSHA has increased in the same time
    period, with the number of students trained more than doubling from 1993
    to 2003.

    Figure 8: Growth in Voluntary Compliance Programs, 1993 to 2003

    Number of worksites, partnerships, or programs

    1,200

    1,000

    800

    600

    400

    200

    0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

    Source: OSHA.

    VPP worksites

    SHARP worksitesa

    Strategic Partnershipsb

    Alliance programsc

    aAlthough the State Consultation Program began in 1975, data are only
    available starting in 1998 for the SHARP consultation worksites because of
    changes in SHARP's program requirements. Figure 8 represents only SHARP
    worksites in federal OSHA states.

    bThe number of Strategic Partnerships reflects a cumulative total for
    federal OSHA states.

    cAlliances can represent many different employers.

    OSHA plans to expand the number of voluntary compliance program
    participants and its compliance assistance activities and has established
    strategic goals for doing so. According to OSHA officials, the agency's
    fiscal year 2004 goals include the addition of 45 new VPP worksites and 50
    VPP Challenge worksites, as well as 50 new strategic partnerships and 75
    new alliances.20 Furthermore, OSHA officials have set a target goal of
    increasing the number of VPP worksites eight-fold-from 1,000 worksites to
    8,000 worksites.21

    20These goals represent increases in federal OSHA states; state-plan
    states are not included in these estimates because they do not follow
    OSHA's Strategic Plan.

    21This goal represents new VPP sites in both federal OSHA and state-plan
    states. OSHA also plans to increase the number of people trained in
    outreach and training programs by 10 percent per year.

    Although it is difficult to quantify, the voluntary compliance programs
    appear to have extended the agency's influence. For example, through the
    agency's enforcement program, OSHA and its state partners conducted almost
    96,000 inspections in 2002-reaching no more than and probably fewer than
    96,000 worksites. The VPP and Strategic Partnership Program in 2003
    directly reached some 6,000 employers, who may not have otherwise been
    selected for OSHA inspections. These two programs, together with the State
    Consultation Program, covered approximately 2.3 million of the more than
    100 million employees under OSHA's oversight. Additionally, although OSHA
    may not have direct contact with an employer as part of its Alliance
    Program or training and outreach activities, employers are reached
    indirectly through the dissemination of safety and health information,
    which, according to our discussions with Alliance participants, has helped
    employees learn about workplace safety and health issues.

        OSHA's Expansion of Voluntary Compliance Programs May Tax Its Limited
        Resources

    The resources OSHA devotes to its voluntary compliance strategies consume
    a significant and growing portion of the agency's limited resources. In
    fiscal year 2003, OSHA executed its numerous programs under a $450 million
    budget. The agency spent $126 million on its voluntary compliance programs
    and compliance assistance activities- approximately 28 percent of its
    total budget-and about $254 million, about 56 percent of its budget, on
    enforcement activities.22 The percentage of resources dedicated to
    voluntary compliance programs and compliance assistance activities has
    increased by approximately 8 percent since 1996, when these programs
    represented about 20 percent of the agency's budget.23 During this same
    period, the proportion of resources OSHA dedicated to its enforcement
    activities fell by 6 percent, from about 63 percent to about 56 percent of
    the agency's total budget, although the total funds devoted to enforcement
    have remained fairly constant because of

    22Of the $254 million devoted to enforcement activities, $91 million was
    given to state-plan states to administer their safety and health programs.
    These states use a portion of these funds to carry out compliance
    assistance activities. In addition, some resources that are devoted to
    other programs, such as technical support, are used for compliance
    assistance activities.

    23Although OSHA changed the way in which it accounts for its budgetary
    resources in fiscal year 1997, we obtained actual budget values for fiscal
    years 1996 and 1997 from the Budget of the U.S. Government for fiscal
    years 1998 and 1999, respectively, which took into account these changes.

    increases in OSHA's total budget over this period.24 In addition,
    enforcement efforts, as measured by the number of inspections, have
    remained constant or increased slightly each year, according to agency
    officials. While it cannot be determined that resources were directly
    redistributed from enforcement to compliance assistance activities,
    funding for OSHA's other programs remained relatively stable, with only
    small increases or decreases in funding since 1996 (see fig. 9).

    Figure 9: Use of OSHA's Budget for Fiscal Years 1996 to 2003, by Program

    Percent of OSHA's budget

    70

    60

    50

    40

    30

    20

    10

                         0
                   1996 1997 1998          1999   2000   2001   2002    2003
                ($345) ($362) ($370)      ($384) ($408) ($455) ($453) ($450)
           OSHA programs (Total budget in
                               millionsa)

    Enforcement

    Voluntary compliance strategies

    Other programsb

    Source: GAO analysis.

    Note: The budget values in this figure represent actual values for fiscal
    years 1996 through 2003. In fiscal year 1997, OSHA changed the way in
    which it accounts for its budgetary resources. However, we obtained actual
    budget values for fiscal years 1996 and 1997 from the Budget of the U.S.
    Government for fiscal years 1998 and 1999, respectively, which took into
    account these changes.

    24While the average yearly growth in the funds budgeted for OSHA's
    enforcement activities from 1996 to 2003 was about 2.5 percent, the
    average yearly growth in funds for voluntary compliance strategies for the
    same period was over 9 percent.

    aDollars were adjusted to 2003 values using the Gross Domestic Product
    (GDP) Price Index. The GDP Price Index was recalculated to make 2003 the
    base year by dividing the index for a given year by the 2003 index. For
    example, to calculate the index using a base year for 2003, the formula to
    recalculate 1991 is (0.8430/1.0585).

    b"Other programs" includes "Safety and Health Standards," "Technical
    Support," "Safety and Health Statistics," and "Executive Direction and
    Administration."

    Notwithstanding their voluntary nature, all of OSHA's voluntary compliance
    programs require agency oversight to ensure that participants comply with
    requirements or agreements and this growing administrative responsibility
    requires concerted agency resources. For example:

    o  	To certify a worksite as a VPP worksite requires a comprehensive
    on-site review that usually lasts 1 week and involves approximately three
    to five OSHA personnel. In contrast to the SHARP on-site review, VPP
    employers use their own resources to implement their safety and health
    programs and the program must be functional before OSHA personnel come to
    the worksite to conduct the on-site review for Star approval.
    Additionally, OSHA reviews participants' yearly self-evaluations to ensure
    that injury and illness rates have not increased beyond program
    requirements and any changes that have been made to the safety and health
    program. Furthermore, VPP worksites must be recertified every 1 to 5
    years, depending on their VPP designation. A VPP worksite recertification
    involves an additional on-site review by OSHA personnel, similar in
    duration and comprehensiveness to the original on-site review.

    o  	In the Strategic Partnership Program, OSHA conducts verification
    inspections for a percentage of partner worksites to ensure that partners
    are abiding by the partnership agreement.

    o  	The Alliance Program involves quarterly meetings with Alliance members
    to ensure progress towards alliance goals are being met. Additionally,
    OSHA training staff reviews all alliance training materials to ensure
    their accuracy with OSHA standards.

    Furthermore, while the State Consultation Program is run by the states,
    OSHA largely funds the program, and its plans to expand the SHARP program
    will require additional agency resources and oversight on the part of
    state consultants. State consultants must work closely with employers to
    help them improve and implement their safety and health programs because
    most small employers do not have the resources necessary to attain SHARP
    status on their own. The consultant also must conduct a one-or-more day
    on-site review of the worksite to ensure that the employer has addressed
    all workplace hazards and properly implemented a safety and health
    program. Additionally, SHARP worksites are

    reevaluated every 1 to 2 years, depending on the amount of time a worksite
    has been in the program and the recommendation of the state consultant.
    These reevaluations require another on-site review of the worksite by the
    state consultants.

    Expansion of OSHA's voluntary compliance programs as planned will further
    require such resources, particularly for the oversight of a much larger
    number of program participants. According to national and regional OSHA
    officials we spoke with, expanding the voluntary compliance programs to
    the intended levels will be difficult given OSHA's current resources, and
    some expressed concern that too much expansion of some programs may
    compromise program quality. Of particular concern to them, they said, has
    been the agency's continued focus on increasing the number of VPP
    worksites. Several regional officials-whose offices are responsible for
    conducting on-site reviews-said that increasing the number of VPP
    worksites would strain their resources because of the number of staff
    required to conduct reviews of new worksites and re-certifications of
    existing worksites.

    To date, regional offices have been creative in their methods of handling
    the increasing number of participants in voluntary compliance programs.
    For instance, the offices have relied increasingly on the use of the
    Special Government Employee Program and the Mentoring Program, both a part
    of the VPP. The first allows employees from VPP worksites, at the expense
    of their employers, to assist OSHA employees in conducting on-site
    reviews. OSHA uses the Mentoring Program to match VPP candidates with VPP
    employers, who assist the candidates in improving their safety and health
    programs and preparing for the on-site reviews. These two programs allow
    OSHA to leverage its resources by using employees at VPP worksites to
    assist OSHA in carrying out the responsibilities involved in operating the
    program, decreasing the number of OSHA personnel needed.

    While several regional OSHA officials said these strategies have allowed
    them to manage the increase in VPP applicants, they are unsure how many
    more they can accommodate without obtaining additional resources.

      Voluntary Strategies Appear to Have Many Positive Outcomes, but the Absence of
      Comprehensive Data Limits Assessment

    While OSHA's voluntary compliance strategies have increased the number of
    worksites the agency reaches, and participants and others have provided
    enthusiastic testimony regarding their ability to foster better safety and
    health practices, the lack of comprehensive data on the outcomes of the
    programs has hindered our ability to assess their effectiveness. Employers
    we visited said their participation had reduced injury and illness rates,
    which in turn had lowered their workers' compensation costs. These
    employers and many employees we interviewed also credited OSHA's voluntary
    compliance programs with improving employee-management relationships and
    their relationships with the agency. However, although OSHA has begun to
    collect data on the impact of some of its voluntary compliance programs,
    it does not yet have the data needed to assess the effectiveness of these
    programs, or make decisions about how to allocate its resources among the
    programs.

        Participants, OSHA Managers, and Specialists Cited Reduced Injuries and
        Illnesses and Other Benefits

    Reduced Injuries and Illnesses for Participating Employers

    The employers and employees at the worksites we visited, OSHA officials,
    and researchers and occupational safety and health specialists identified
    many benefits of OSHA's voluntary compliance programs.

    The most commonly cited benefit of participating in OSHA's voluntary
    compliance programs was the reduction in the number and rate of injuries
    and illnesses. All nine employers we visited25 reported that the number of
    injuries and illnesses at their worksites had declined since they began
    participating in the programs. For example, one VPP site in the paper
    industry reported that it typically had 12 to 14 accidents that resulted
    in injuries each year before working toward VPP approval, but that the
    worksite has reduced that number to 5 accidents or fewer in the last 3
    years. Another participant, a partnership comprising eight nursing homes,
    reported in its annual evaluation that the injury and illness rate for its
    second year of participation had decreased 27 percent. OSHA, based on

    25We visited employers participating in OSHA's voluntary programs in
    Georgia, Illinois, and Massachusetts. In each state, we visited three
    employers-one that participated in the VPP, one in the State Consultation
    Program, and one in the Strategic Partnership Program. At each of these
    employers, we interviewed management officials and members of the safety
    committee, and we also conducted a focus group of employees not directly
    involved with safety and health issues. The nine employers we visited were
    from the manufacturing, construction (both roofing and steel erection),
    transportation (aircraft maintenance), healthcare (nursing home), and food
    (meatpacking) industries. The number of employees at the worksites ranged
    from about 30 employees to almost 3,000 employees.

    Lower Costs

    Improved Relationships with OSHA and between Employers and Employees

    limited analysis of VPP sites' annual injury and illness data, reported
    that participating employers that had effectively implemented workplace
    safety and health programs had significantly fewer injuries and
    illnesses-54 percent fewer-than comparable worksites in the same
    industries that had not implemented such programs.

    A second benefit of voluntary compliance programs is decreased costs to
    employers, primarily through reductions in workers' compensation
    premiums.26 Employers at the sites we visited reported that they had seen
    significant decreases in their workers' compensation costs. For example, a
    meat packaging facility we visited estimated workers' compensation costs
    savings of about $200,000 during the period in which it had been involved
    with VPP. In addition to lowered workers' compensation costs, employers
    commented that improvements in safety and health had reduced employers'
    cost of lowered productivity that resulted from employees missing work
    because of injuries and illnesses. Although OSHA has information on its
    Web site on how reducing injuries such as by implementing safe procedures
    can save employers money, it does not include information on specific
    industries. OSHA officials told us that, although the experiences of some
    companies in saving money through safety improvements could be helpful to
    other employers, some companies are reluctant to share their data on cost
    savings with OSHA. However, the agency is developing some of the
    information through its Alliance Program. For example, the objectives of
    one alliance with a health care company include developing and
    incorporating materials into business school curricula that communicate
    the business value and competitive advantages associated with implementing
    comprehensive safety and health programs in the workplace.

    According to employers and employees at worksites we visited, voluntary
    compliance programs also improved their relationships with OSHA and
    improved the relationships between management officials and employees. At
    every worksite we visited, representatives told us they were very
    comfortable with interacting with OSHA. Some spoke of a change from
    fearing OSHA's visits to seeing them as helpful. For example, management
    officials at a steel erector company commented that, before their
    partnership, management did not want to talk to OSHA and dreaded its
    visits whereas, after participating in the partnership, they have a good

    26The reduction in workers' compensation premiums is closely linked to the
    reduction in injury and illness rates, since these costs are based on
    employers' injury and illness rates.

    Increased Responsibility for Safety by Management and Employees

    relationship with OSHA staff. Several representatives at the worksites we
    visited also commented that they now regularly call OSHA for answers to
    safety problems. Some employees at the sites also commented that they have
    seen improved relationships with OSHA. For example, the union president at
    a VPP site said that, as a result of the close interaction with OSHA staff
    during the VPP approval process, he feels comfortable calling OSHA
    directly to discuss safety and health issues.

    Similarly, employees and employers at several worksites gave examples of
    how their participation in these programs resulted in improved
    relationships between management and employees. One safety director for a
    union involved in a partnership said that after some workers were fired
    for not complying with safety rules, they came to the union looking for
    support, but because of the involvement of the union in the partnership,
    the union supported the disciplinary action. Both management and employees
    recounted how important working together was during the approval process
    and how those efforts have continued in order to maintain their
    participation in the programs, often through team meetings and safety
    committee meetings.

    Employers and employees at the workplaces we visited also reported a shift
    to a safety culture in which they all take responsibility for safety,
    thereby contributing to improved productivity, morale, and product
    quality. At all the sites we visited, employees spoke of being empowered
    to remind others to comply with safety requirements. Several described a
    shift in attitude from noncompliance to one in which good safety
    procedures, such as wearing appropriate personal protective equipment and
    inspecting equipment, were ingrained in daily activities. They also said
    that they felt good that management had made the additional investment in
    safety. In addition, management officials at several sites said that this
    increased attention to safety had benefited their firm in other ways. Some
    mentioned that others using their services reviewed the company's safety
    records or training, and that the company's recognition as an exemplary
    site gave them a competitive advantage. For example, management officials
    at one SHARP site whose workers construct facilities on their clients'
    worksites said that the SHARP certification helped the company continue to
    get contracts for projects. At one VPP site, management representatives
    also told us that participation had brought an improved workplace ethic
    where employees felt management cared about them, lower absenteeism rates,
    and a more disciplined approach to work.

    Safety and Health Improvements for Nonparticipating Employers

    Improved Safety and Health for Small Employers

    In addition to the more anticipated benefits of improving injury and
    illness rates and reducing employers' costs, participants commented that
    VPP, SHARP, and Strategic Partnership Program participants played a role
    in influencing other employers to implement good safety and health
    practices. A key component of VPP is outreach to other firms, and
    representatives at all three VPP sites we visited spoke of mentoring to
    others in their industries. For example, one site hosted a VPP Day to
    encourage others within its industry to participate in the program.
    Interestingly, one of the VPP sites we visited had been encouraged by
    other VPP sites to participate in the program. Participants in the
    Strategic Partnership Program and SHARP sites we visited also reached out
    to others within their industry, informing them of the value of good
    safety and health practices and encouraging their participation in OSHA's
    voluntary compliance programs. Some specialists with whom we spoke
    commented on the value of this aspect of the programs, although one noted
    that the mentoring focus should be on improving employers' safety and
    health practices, not on helping employers complete the program
    application paperwork.

    Employers participating in these programs also sometimes influenced other
    employers' practices by requiring them to meet certain standards if they
    were working on the participating company's premises or to qualify as one
    of the company's subcontractors. In some cases, they also reported that
    other companies sought them out as suppliers and contractors because of
    their good safety records. OSHA officials also noted that participation in
    voluntary compliance programs could influence those companies' suppliers
    and contractors to improve their safety. For example, they told us that
    many construction contractors now require their subcontractors to have
    insurance rates below a certain level-rates that are based on their injury
    and illness rates.

    Several participants and specialists reported that the State Consultation
    Program, Alliance Program, and OSHA's outreach and training help inform
    small employers-who typically have less in-house expertise to address
    safety and health issues-about how to make safety and health improvements.
    The State Consultation Program, which is designed to provide guidance on
    specific problems or, more generally, employers' health and safety
    management programs, is targeted to small employers. The three sites we
    visited that utilized this program had initially sought consultations
    because they needed expert advice on safety and health practices that was
    not available from their own staff. According to several specialists, the
    Alliance Program also connects with small businesses by working through
    the trade associations that they participate in, because

    the associations build on already existing relationships. In addition, the
    OSHA regional offices we visited had used several outreach approaches to
    reach out to small employers, for example, a free forum where small
    contractors could learn the proper use of cranes and scaffolding.
    Similarly, one of OSHA's area offices provided employers training courses
    at the local Small Business Development Center on OSHA's requirements-
    including its record-keeping requirements-and how good safety and health
    practices can save them money. Regional offices have also developed
    newsletters for employers in specific industries, such as a letter and
    accompanying compact disc on electrical hazards provided by one office to
    electrical contractors.

    Although we saw evidence of OSHA's efforts to reach more small businesses,
    several specialists said OSHA should include more small businesses in
    voluntary compliance program activity. A representative from a national
    employers association commented that smaller employers fear OSHA because
    they do not know what to expect when the agency goes into a business, even
    if for compliance assistance activities. Several specialists with whom we
    spoke noted that smaller businesses might not be aware of the voluntary
    compliance programs that are available. A representative from an insurance
    company who addresses risk management regularly commented that smaller
    worksites, particularly those that change locations frequently such as
    sites in the construction and roofing industries, are more likely to have
    safety problems.

        Because OSHA Has Just Begun to Collect and Analyze Data on Its Voluntary
        Compliance Programs, Their Effectiveness Cannot Be Fully Assessed

    OSHA currently lacks the data needed to fully assess the effectiveness of
    its voluntary compliance programs. Developing outcome measures is
    difficult, particularly when factors other than program participation can
    affect key indicators such as injury and illness rates. However, agencies
    are required to develop such measures and it is especially important for
    OSHA, given its limited resources, to be able to evaluate the
    effectiveness of these programs.27 Currently, OSHA does not collect
    complete, comparable data needed to measure the value of its programs,
    including their relative impact, resource use, and effect on the agency's
    mission. In OSHA's current strategic management plan, one of the agency's
    three goals includes increasing the number of participants in voluntary

    27Since the enactment of the Government Performance and Results Act of
    1993, federal agencies have been increasingly required to focus on
    achieving results and to demonstrate how their activities help achieve
    agency goals.

    compliance programs and improving the programs' effectiveness. Another
    goal includes improving the agency's access to accurate, timely data, and
    enhancing its measures for assessing the effectiveness of its programs.
    However, OSHA has not yet developed a comprehensive strategic framework
    that articulates how the programs fit together in accomplishing the
    agency's goals or how its resources should be allocated among the various
    programs. While OSHA or its state representatives ensure that voluntary
    program participants are complying with the programs' requirements, and
    often obtains some information on program effectiveness, such as data on
    injuries and illness, it does not assess the overall impact of the
    programs on worksites' safety and health.

    Currently, OSHA's assessments of each program are at a different stage of
    development and the approaches vary:

    o  	VPP-Presently, OSHA's analysis of the program is limited to reviewing
    VPP sites' annual injury and illness rates in the years immediately before
    they are approved for the program. However, because worksites often make
    safety and health improvements over a longer period in anticipation of
    their participation in the program but before they are approved, the rates
    OSHA reviews may not reflect changes in injury and illness rates from
    improvements made as a result of their participation. To assess the impact
    of VPP, OSHA contracted with a private firm in October 2003 to conduct an
    evaluation of the changes in participating employers' injury and illness
    rates resulting from the program. The evaluation, to be completed in
    September 2004, will evaluate the impact of VPP from the point at which
    employers decide to apply for VPP until they are designated a VPP site. It
    will also determine the impact of VPP on other worksites through
    participating employers' outreach and mentoring efforts and provide data
    on dollars spent by VPP sites on safety and health programs and cost
    savings from reduced workers' compensation costs. However, because VPP
    does not require applicants to provide data on their injury and illness
    rates for the years prior to participation, OSHA will still be unable to
    systematically assess whether improvements in their injury and illness
    rates resulted from program participation.

    o  	State Consultation Program-OSHA has been assessing possible approaches
    for obtaining data on these programs, but it has been difficult because of
    the confidentiality that state programs provide to program participants.
    In an October 2001 report on the program, we suggested that

    OSHA collect additional data to use in evaluating its impact.28 In 2002,
    an OSHA-sponsored evaluation of the program concluded that the program
    resulted in some positive outcomes, including that participating worksites
    (1) were cited for fewer serious violations if inspected by OSHA within 2
    years of the consultation visit and (2) had larger average declines in
    lost workday injury and illness rates than other worksites.29 The report,
    however, noted that factors other than the consultation program might have
    contributed to these positive outcomes and that further analysis,
    particularly the long-term effects of the program, would require the
    collection of more data. OSHA attempted to collect such information
    through a data initiative it uses to obtain information on the impact of
    its enforcement efforts.30 However, in 2002, the Office of Management and
    Budget denied OSHA permission to extend this data collection effort to
    collect data from all employers, including those with less than 40
    employees. These employers represent a significant portion of the
    employers that participate in the State Consultation Program, but are not
    presently addressed in the data initiative.

    o  	Strategic Partnership Program-Currently, OSHA requires program
    participants to file annual evaluation reports. However, according to an
    OSHA-requested study of reports submitted through September 30, 2002, the
    agency did not collect consistent information from partnerships or use
    common performance measures.31 For example, some partnerships did not
    submit evaluation reports, while others provided incomplete or
    inconsistent information because OSHA allowed participants to select the
    types of data reported. Similarly, the U. S. Department of Labor's Office
    of Inspector General, which also assessed the program, reported in
    September 2002 that there was insufficient information on five of the nine

    28U.S. General Accounting Office, Workplace Safety and Health: OSHA Should
    Strengthen the Management of Its Consultation Program, GAO-02-60
    (Washington, D.C.: Oct. 12, 2001).

    29John Mendeloff, Ph.D, and Wayne Gray, Ph.D, Evaluation of the OSHA
    Consultation Program, report prepared for the OSHA Office of Program
    Evaluation and Audits (Lexington, Mass.: July 2002).

    30OSHA collects occupational illness and injury information through the
    OSHA Data Initiative from employers within specific industries and size
    categories. The information is used to identify and target agency
    interventions to those employers who have serious workplace problems.

    31TATC Consulting, Evaluation of the OSHA Strategic Partnership Program,
    (Prepared for the Office of Partnerships & Recognition, Directorate of
    Cooperative and State Programs, OSHA) (Washington, D.C.: Feb. 14, 2003).

    partnerships it analyzed to evaluate their impact.32 For example, one
    partnership only provided data on injuries and illnesses for 25 of its 222
    participants. In response to these studies, OSHA officials said that they
    were obtaining comments on a revised format for these reports that would
    include common data elements for all partnerships and that OSHA would then
    be able to establish a new database designed to track consistent measures
    across partnerships. The revised format for the partnership reports will
    be available in Spring 2004, according to an OSHA official.

    o  	Alliance Program-Goals for each alliance are individually developed
    and are often not readily measurable. Currently, OSHA monitors goals and
    accomplishments of individual alliances by participating in quarterly
    meetings and preparing annual evaluations. OSHA officials told us that
    OSHA has not yet developed an evaluation approach for the national
    program. Several individual Alliance Program representatives from
    alliances established in 2002 told us that they have not established a
    system for assessing the impact of their alliances, and some commented
    that this would be difficult, given the nature of their goals. For
    example, one alliance's goals are to provide information and guidance to
    help protect employees' safety and health-particularly from hazards likely
    to result in amputations and ergonomic hazards-and to provide training to
    employers to help identify and correct these hazards. While the alliance
    has provided information to employers and workers on its Web sites, and
    has developed and provided training, it is difficult to determine the
    impact of the alliance since companies also implement safety and health
    improvements on their own.

    32U.S. Department of Labor, Office of Inspector General, Performance Audit
    of Strategic Partnership Program, Occupational Safety and Health
    Administration, for the Period January 1, 1995 through February 28, 2002,
    Report No. 05-02-007-10-001. (Washington, D.C.: September 2002).

      Researchers and Other Specialists Suggested a Variety of Additional Voluntary
      Compliance Strategies

    Researchers, safety and health practitioners, and other specialists we
    interviewed suggested a variety of additional strategies for voluntary
    compliance, some of which might require legislative changes.33 Some
    strategies might help OSHA leverage its existing resources and others
    suggest the need for additional resources. The strategies that researchers
    and specialists proposed generally fell into four categories: (1)
    providing more incentives to encourage additional employers to voluntarily
    improve safety and health in the workplace; (2) promote more systematic
    approaches to workplace safety and health; (3) focusing more specifically
    on high-hazard, high-injury workplaces; and (4) using third-party
    approaches to achieve voluntary compliance. While these strategies could
    be potentially useful and effective, according to specialists, they could
    also entail the need for safeguards, oversight, and enforcement. (See
    table 2.)

    33To obtain additional suggestions for voluntary compliance, we drew upon
    the expertise of a range of people knowledgeable about occupational safety
    and health issues, seeking a balance of perspectives. These included
    academic researchers who had conducted studies for or about OSHA;
    practitioners from safety and health professional associations; current
    and former state-plan state administrators of occupational safety and
    health programs; specialists representing employer organizations; and
    union representatives representing employee perspectives. In selecting
    those we interviewed for these discussions, we examined literature from
    the field and considered those who had conducted evaluations or published
    research on OSHA programs or who had participated in GAO expert panels on
    worker protection and workforce issues.

    Table 2: Additional Voluntary Compliance Strategies Strategy suggested

    I. Provide more incentives for employers to  o  Develop and publicize
    industry-based information on the financial benefits of make safety and
    health improvements. improving workplace safety and health.

    o  	Encourage state workers' compensation programs and private insurers to
    consider participation in voluntary compliance programs when calculating
    premiums.

    o  	Offer tax credits or other incentives to employers for making capital
    and other improvements to safety and health.

    o  Publish injury and illness rates for worksites with poor safety and
    health records.

    II. Promote more systematic approaches to  o  Encourage employers
    participating in voluntary programs to influence their workplace safety
    and health. contractors and suppliers to make safety and health
    improvements.

    o  Require certain employers to have safety and health management
    programs.

    o  Require employers to have an employee-management safety committee.

    III. Focus more on high-hazard, high-injury  o  Focus voluntary efforts on
    high-hazard, high-injury workplaces.

    workplaces.  o  	Allow employers with high injury and illness rates to
    choose between likely inspection and cooperative approaches.

    IV. Use third-party approaches to achieve  o  Support the development of a
    voluntary national or international standard for voluntary compliance.
    workplace safety and health.

    o  	Allow employers to use private consultants certified by OSHA to
    conduct worksite safety and health evaluations, in return for incentives
    such as a limited exemption from future inspections or reduced civil
    penalties.

      Source: GAO analysis of suggestions made by academic researchers, safety and
                      health practitioners, and other specialists.

        Provide More Incentives for Employers to Make Safety and Health Improvements

    Specific suggestions for additional financial incentives included (1)
    providing information to employers on the possible financial and other
    benefits of improving safety and health, (2) encouraging the use of
    workers' compensation incentives for employers that participate in OSHA's
    voluntary compliance programs, and (3) creating tax incentives for
    improvements. Another suggestion was to deter employers from continuing
    poor safety and health practices by publishing injury and illness rates
    for such worksites.

    o  	Develop and Publicize Information on Financial Benefits-To counter
    employer assumptions that safety and health improvements would necessarily
    be costly, some specialists called for the agency to develop and publicize
    more industry-specific data about the financial and other benefits
    possible by investing in safety and health improvements. OSHA provides
    general information about the direct and indirect costs of injuries and
    illnesses on its Web site and is working to develop more industry data

    through its alliances and other voluntary programs.34 As useful as
    industry-specific information might be, especially to small employers,
    such proprietary data are difficult to obtain and expensive to develop,
    according to specialists. Developing this information might also be a
    better role for industry than for government. In addition, improving
    safety and health could cost employers more money, not less.

    o  	Encourage Workers' Compensation Incentives-OSHA could encourage state
    programs and private insurers to consider employers' participation in
    voluntary compliance programs when they calculate premiums for
    employers.35 Such incentives could include, for example, reductions in
    employers' insurance premiums or credits for participation. For many
    employers, the possibility of achieving lower insurance premiums could be
    a significant motivator for improving workplace safety and health.
    However, because each state has its own laws governing workers'
    compensation programs, it could prove challenging to create such financial
    incentives.36 Furthermore, although some insurers offer rate reductions to
    employers that participate in OSHA's voluntary compliance programs,
    according to OSHA officials, the agency's other attempts to work with
    insurers have not succeeded because they did not want to have clients
    perceive them as an agent of OSHA.37 Figure 10 describes the relationship
    between workers' compensation and occupational safety and health programs
    in two states.

    34For example, see
    http://www.osha.gov.Publications/JSHQ/fall2002html/safety_health.htm and
    http://www.osha.gov/dcsp/smallbusiness/safetypays.html.

    35Workers' Compensation laws are designed to ensure that employees who are
    injured or disabled on the job are provided with fixed monetary awards,
    eliminating the need for litigation. Workers are generally protected
    through state statutes. Federal statutes provide protection for federal
    employees and certain occupational classes.

    36OSHA officials said that the reason for this is that the OSH Act may not
    displace or affect "in any manner" any state workers' compensation law.
    See 29 U.S.C. S:653 (b)(4).

    37OSHA has an alliance with one private insurer and has involved insurers
    in several partnerships.

    Figure 10: Links between Occupational Safety and Health and Workers'
    Compensation Programs in Oregon and California

    Some state-plan states, such as Oregon and California, have close links
    between their workers' compensation programs and the state's occupational
    safety and health program, especially in the sharing of data. In both
    states, the occupational safety and health program is under the same
    department as the workers' compensation program. In Oregon, the two
    programs also share the same data system, which allows the state to access
    workers' compensation claims data and to focus the state's inspection and
    consultation resources on hazardous industries and workplaces. In
    California, the occupational safety and health division similarly uses
    workers' compensation data to encourage employers with high accident and
    illness rates to seek consultations. To fund these targeted consultations,
    California also passed a special assessment on its workers' compensation
    program for such employers, with sliding fees based on the size of their
    payroll.

    Source: GAO analysis.

    o  	Offer Tax Incentives for Capital and Other Improvements-Tax
    incentives, which would require changes in the tax code, may be especially
    useful for helping small employers who might lack resources make safety
    and health improvements. Having a tax incentive also signals to businesses
    that the government values such investments in safety and health. However,
    distinguishing business purposes from safety and health purposes can be
    difficult with tax incentives. Tax incentives could also tend to favor
    capital-intensive solutions to safety and health problems- such as the
    purchase of equipment-rather than behavioral or systematic solutions. They
    may also subsidize improvements that employers might have made in any
    case. Finally, in addition to the potential for manipulation, using tax
    incentives could entail lost tax revenues, without OSHA knowing their
    impact on safety and health.

    o  	Publish Injury and Illness Rates for Employers' Worksites- Gathering
    and publishing the injury and illness rates for employers' worksites could
    build on market incentives to pressure employers to change their
    practices.38 For example, a subcontractor might find it difficult to
    obtain a contract because of liability concerns if it were known that the
    company had a high rate of workplace injuries. Right now, OSHA publishes
    the names of about 3,200 worksites identified through its site-specific
    targeting program as having high rates of injuries and illnesses,

    38One federal agency that uses such an incentive is the Environmental
    Protection Agency, which publishes annually the top 10 facilities by
    industry that have the largest total toxic chemical releases. The agency
    credits its Toxics Release Inventory-a national database that identifies
    facilities; chemicals manufactured, processed, and used at these
    facilities; and the annual amounts released-with influencing industries to
    reduce their chemical releases.

    but it does not publish the actual rates for these worksites. However,
    there are several potential problems with this approach. First, injury and
    illness rates for one particular year may not accurately capture the
    performance of employers, especially small employers.39 Second, businesses
    would likely oppose the publication of these data because they view
    worksite injury and illness rates as confidential business information
    that, if published, could allow business competitors to glean information
    about the company's productivity. In fact, OSHA took this position when it
    denied, in July 2003, a Freedom of Information Act appeal that sought to
    obtain rates for specific worksites: OSHA relied on an exemption
    protecting trade secrets and commercial or financial information and
    refused to disclose the information unless the parties in question
    approved.40 Finally, publicizing injury and illness data might also
    pressure employers to underreport injuries and illnesses, creating the
    need for further policies or legislation requiring full and accurate
    reporting and recording.

        Promote More Systematic Approaches to Workplace Safety and Health

    Specific suggestions from researchers and specialists included (1)
    encouraging employers that participate in OSHA's voluntary programs to
    influence their contractors and suppliers to make safety and health
    improvements, (2) requiring certain employers to have a safety and health
    management program, and (3) requiring employers to have an
    employee-management safety and health committee.

    o  	Encourage Employers to Influence Contractors and Suppliers-To
    "influence the supply chain," OSHA could encourage employers participating
    in its voluntary programs to consider suppliers and contractors' safety
    and health records before making contracting decisions and encourage their
    suppliers and contractors to have a safety and health program. OSHA
    currently requires this approach of employers participating in VPP.41
    Because employers are increasingly using contractors and temporary
    workers, focusing employers' attention on

    39A small number of injuries at a small employer's worksite can increase
    its injury rates dramatically. For this reason, injury and illness rates
    for small employers should be interpreted with caution.

    40According to OSHA, the agency's decision was appealed to a U.S. district
    court in New York in October 2003.

    41VPP participants are required to ensure that safety and health
    considerations are addressed in selecting contractors and when contractors
    are onsite. In addition, they are required to encourage contractors to
    develop and operate effective safety and health management systems.

    contractors' and suppliers' safety and health records was considered a

    useful way to achieve some leverage in a changing economy.42 Safety and

    health problems at contractors and suppliers could also entail potential

    costs for employers or could also indicate other forms of poor

    management, such as poor product quality. As an example of the

    effectiveness of this approach, one automaker grouped its suppliers into

    three tiers according to their safety and health records, and then each
    tier

    of suppliers pressured the lower tier to improve, according to a
    specialist

    we interviewed. However, the degree of an employer's potential influence

    over suppliers and contractors could vary by employer size as well by

    industry. For example, a Fortune 500 employer could have far more

    influence on its supply chain than a small body shop, and the construction

    industry, which relies on numerous subcontractors working under a

    general contractor, may be better able to influence subcontractors than

    other industries. Implementing this approach may be difficult because

    suppliers and contractors may be unwilling to share their safety and
    health

    records or plans and employers would need staff to conduct such reviews

    of its suppliers and contractors. It may be similarly difficult for OSHA
    to

    monitor and verify this process through employers participating in its

    voluntary programs.43

    o  	Require Certain Employers to Have Safety and Health Management
    Programs-As discussed in a previous GAO report and testimony,44 OSHA could
    require certain employers-such as those with high injury and illness
    rates-to have safety and health management programs.45 The establishment
    of safety and health programs, including elements such as hazard
    prevention and control, is currently required for participants in the

    42Voluntary compliance may also be more likely when there is a greater
    likelihood that a

    firm's customers will take into account its compliance record in making
    purchasing

    decisions. See Sidney Shapiro and Randy Rabinowitz, "Voluntary Regulatory
    Compliance in

    Theory and Practice: The Case of OSHA," Administrative Law Review (52
    Admin. L. Rev.

    97) Winter 2000, p. 13.

    43Making it a requirement might raise a number of legal concerns,
    including whether such a requirement would exceed OSHA's authority under
    the OSH Act.

    44U.S. General Accounting Office, Occupational Safety & Health: Options
    for Improving Safety and Health in the Workplace, GAO/HRD-90-66BR
    (Washington, D.C.: August 1990), pp. 46-48, and Occupational Safety and
    Health: Worksite Safety and Health Programs Show Promise, GAO/T-HRD-92-15
    (Washington, D.C.: Feb. 26, 1992).

    45OSHA established guidelines for voluntary safety and health programs in
    1989. In 1998, OSHA drafted a proposed rule that would have required
    employers, except those engaged in construction and agriculture, to
    establish a safety and health management program. OSHA withdrew the rule
    in August 2002.

    VPP, Strategic Partnership, and SHARP programs.46 Extending this approach
    to other employers could help prevent additional injuries and illnesses.
    It could also help employers respond more flexibly to advances in
    technology and other workplace issues than with specific standards. On the
    other hand, it could be difficult for OSHA to enforce employers' use of
    safety and health programs, and small and mid-size employers may not have
    the information or tools to implement these programs without assistance.
    In our earlier testimony, we noted that reservations about these programs
    stem primarily from concern about implementation issues, rather than about
    their value.47

    Require Employee-Management Safety Committees-OSHA could issue a
    regulation requiring employers to have an employee-management safety
    committee at every worksite to investigate accidents, settle disputes, and
    provide information to management.48 The VPP does not require employers to
    have such a committee at every worksite, but does consider it one way to
    achieve employee involvement.49 If required for all employers, such
    committees might raise additional issues, including the determination of
    who would represent workers.50

        Focus More on High-Hazard, High-Injury Workplaces

    Specific suggestions for focusing more on high-hazard, high-injury
    workplaces included targeting employers with the highest levels of injury
    and illness for voluntary programs and having such employers choose
    between likely inspection and cooperative approaches with the agency.

    o  	Target Employers with Highest Levels of Injury and Illness-OSHA could
    classify employers according to their level of injury and illness and

    46About 10 state-plan states require employers to have such programs,
    according to a report on state plan activities issued August 12, 2003 by
    the Occupational Safety & Health State Plan Association: California, for
    example, generally requires employers to set up effective written injury
    and illness prevention programs.

    47See GAO/T-HRD-92-15, p. 2.

    48This suggestion was also discussed in a previous GAO report: See
    GAO/HRD-90-66BR, pp. 48-50.

    49Oregon makes it mandatory for most employers to have a joint
    management-labor safety committee.

    50To comply with the National Labor Relations Act, employers may not
    dominate committees that are considered "labor organizations." See
    Electromation, Inc., 309 N.L.R.B. 990 (1992), enforced, 35 F.3d 1148 (7th
    Cir. 1994).

    focus the agency's voluntary compliance efforts on those with the highest
    rates. While this suggestion was seen as a way for OSHA to best use its
    limited resources, according to specialists, it might also entail
    additional costs for data development.

    o  	Allow Employers to Choose between Likely Inspection and Cooperative
    Approaches-Another suggestion was for OSHA to pursue a previously
    attempted strategy targeting employers with the highest rates of injury
    and illness.51 The agency informed these employers that they had been
    placed on a primary inspection list, but that they could reduce the
    likelihood of inspection if they chose to work cooperatively with the
    agency by fulfilling certain requirements.52 Now, when OSHA informs
    selected employers that they have among the highest injury and illness
    rates in the country, the agency refers employers to outside consultants,
    insurance carriers, and state workers' compensation offices for advice on
    improving safety and health; employers with fewer than 250 employees are
    also referred to the State Consultation Program.53

    Use Third-Party Approaches

    Specific suggestions for third-party approaches included (1) supporting
    the development of a voluntary national or international standard for
    workplace safety and health and (2) using private consultants to conduct
    safety and health evaluations of worksites.

    o  	Support Development of a Voluntary National or International Standard
    for Workplace Safety and Health-Having a voluntary national or
    international standard could help strengthen the infrastructure for
    workplace safety and health and could build on some employers' desire for
    a widely recognized credential that could be useful to them in competing
    with other companies, especially in global markets. For example, employers
    can seek certification from independent organizations

    51The implementation of this strategy, the Cooperative Compliance Program,
    was challenged in court. The court held that the program was not properly
    implemented and that the agency should have implemented it through notice
    and comment rulemaking. See Chamber of Commerce v. U.S. Department of
    Labor, 174 F.3d 206 (D.C. Cir.1999). The Cooperative Compliance Program
    was based, in turn, on an earlier pilot called the Maine 200 program that
    was carried out in the early 1990s.

    52Requirements included identifying and correcting hazards, reducing
    injuries and illnesses, implementing a safety and health program,
    involving employees, and providing OSHA with annual data on injuries and
    illnesses.

    53OSHA officials noted that, following the issuance of this letter, the
    State Consultation programs often report a distinct rise in the number of
    requests for consultations.

    for achieving International Organization for Standardization standards.54
    To a certain extent, OSHA is currently playing a role in the development
    of a voluntary standard, according to OSHA, since some OSHA staff members
    are assisting a national standards committee that is working on a safety
    and health standard. In addition, many industry associations are involved
    on this committee, OSHA staff noted. Limitations of this approach are
    that: (1) such standards are not mandatory, but serve more as flexible
    guidance, because they reflect agreements reached by committees; (2)
    although large employers competing in the international marketplace tend
    to seek out international standards credentials, these are not necessarily
    the employers needing OSHA's attention; and (3) it can be difficult to set
    voluntary standards because organizations need to invest resources and
    provide appropriate expertise.

    o  	Use Private Consultants to Conduct Safety and Health Evaluations-This
    suggestion would entail allowing employers to voluntarily use private
    consultants to conduct worksite safety and health evaluations and certify
    worksites, in return for incentives, such as a limited exemption from
    future inspections or reduced civil penalties.55 Using third-party,
    private-sector consultants to certify workplace safety and health was also
    proposed in the late 1990s as an amendment to the OSH Act-known as the
    SAFE Act.56 Using consultants could leverage existing OSHA resources by
    helping workplaces that might never otherwise see an OSHA inspector,
    especially small employers, and possibly also by enabling employers to
    address additional safety and health issues that might not be covered
    under an OSHA inspection for

    54The International Organization for Standardization is a nongovernmental
    network of national standards institutes from about 150 countries that
    issues voluntary standards, including standards for environmental
    management. Experts on loan from industries and businesses develop these
    standards with assistance from representatives from government agencies,
    universities, and laboratories. Audits and certifications of companies
    applying for certification are carried out by independent certification
    organizations. The United States representative to the international
    organization is the American National Standards Institute, a private
    nonprofit organization.

    55OSHA uses private sector consultants indirectly through its State
    Consultation programs as well as Special Government Employees during VPP
    evaluations. We commented on this suggestion in our 1990 report on OSHA
    options, p. 35.

    56The Safety Advancement for Employees Act of 1999, known as the SAFE Act,
    was introduced in the 105th Congress as S. 1237 and in the 106th Congress
    as S. 385, but was never enacted. The act was designed to encourage
    employers to participate in voluntary safety and health audits using the
    expertise of consultants certified by OSHA. Participants would have been
    exempt from civil penalties for one year if they had been certified as
    compliant.

    compliance with standards. At the same time, using consultants also raises
    various implementation, oversight, and legal issues described below.

    (a) Implementation-A key issue is that consultants' independence may be
    compromised if employers paid consultants directly for conducting audits
    and certifying employers.57 Employers might also need more than one
    consultant to conduct a comprehensive review of both safety and health
    issues. Finally, the use of consultants would set the federal program in
    competition with the State Consultation Program, according to OSHA
    officials.

    (b) Oversight-One issue is what kind of oversight is possible when
    employers will not-or cannot-make improvements that consultants recommend.
    Another is that differences in consultants' focus would create
    inconsistencies in the certification process, since a workplace evaluation
    could focus on compliance with OSHA standards or on the broader safety and
    health environment, as under OSHA's VPP, Partnership, and SHARP programs.

    (c) Legality-Finally, constitutional issues have been raised as to whether
    OSHA can use private consultants, as envisioned by the SAFE Act, to
    conduct safety and health evaluations of employers' worksites and to issue
    certificates of compliance, exempting employers from civil penalties for a
    limited period of time. For example, when Congress was considering the
    SAFE Act, the Justice Department argued that the act might be
    unconstitutional because, among other things, it delegated executive
    functions to private entities without providing adequate supervision or
    accountability for their activities. The Senate Committee on Health,
    Education, Labor, and Pensions, which had jurisdiction over the
    legislation, disagreed with Justice's arguments, asserting that they
    reflected a misunderstanding of the proposed role and authority of
    third-party consultants.58

    57One suggestion to ensure consultants' independence was to have employers
    contribute to a fund that OSHA would manage and use this fund to pay
    consultants. This approach creates an additional oversight responsibility
    for OSHA. Because consultations are provided at no cost to the employer
    under the State Consultation Program, setting up a federal program with
    user fees for employers may not be feasible.

    58See S. Rep. No. 106-202, at 25-26, 63-64 (1999).

    Conclusions

    Recommendations for Executive Action

    By many accounts, OSHA's voluntary compliance strategies have improved
    employers' safety and health practices by allowing the agency to play a
    collaborative, rather than a policing, role with employers. The testimony
    and enthusiasm of participants suggests that OSHA's voluntary compliance
    programs have considerable value. The agency has begun to develop
    performance measures and collect data on some program outcomes, as well as
    undertake efforts to evaluate its programs, such as contracting for a VPP
    evaluation and revising the performance evaluation format for the
    Partnership program. However, because OSHA does not yet have comprehensive
    data on its voluntary compliance programs, the agency cannot fully assess
    the effectiveness of any single program or compare the relative
    effectiveness of the programs. OSHA should position itself to know, for
    example, the relative effectiveness of programs that focus on employers
    predisposed to following good safety and health practices as compared to
    those that attempt to reach employers and industries with poor safety and
    health records. Without such information, the agency is also limited in
    its ability to make sound decisions about how to best allocate its
    resources among individual programs, or between voluntary compliance
    programs and its other activities, particularly enforcement.

    After several years of experimentation and growth, this is an opportune
    time for OSHA to determine how to best target its voluntary compliance
    efforts. Having a mix of strategies appears useful in reaching different
    types of employers and industries. At the same time, having such a mix may
    unduly tax the agency's resources unless it is accompanied by a
    comprehensive, strategic framework that establishes priorities and defines
    how these strategies fit together to accomplish the overall goals of the
    agency. Absent such a strategic framework, OSHA cannot ensure that it is
    making the best use of its resources to improve workplace safety and
    health. Furthermore, the agency must balance its plans to expand its
    voluntary compliance programs with its enforcement responsibilities. Given
    OSHA's current resources, it is unclear how it can undertake much
    expansion without a careful assessment of the impact on its resources and
    other programs. Unless it has such an assessment, OSHA runs the risk of
    compromising the quality of its voluntary compliance programs.

    In order to strengthen OSHA's voluntary compliance strategies, the
    Secretary of Labor should direct the Assistant Secretary for Occupational
    Safety and Health to

    o  	identify cost-effective methods of collecting complete, comparable
    data on program outcomes for the VPP and Partnership programs to use in
    assessing their effectiveness, and continue to search for cost-effective
    approaches that will enable the agency to assess the effectiveness of the
    State Consultation and Alliance programs, and

    o  develop a strategic framework that articulates the purposes and

      Agency Comments

    distinctions of the different voluntary compliance programs, sets
    priorities among these programs, and identifies how the agency's resources
    should be allocated among these programs, before further expanding them.

    We provided a draft of this report to OSHA for comment. OSHA's formal
    comments and our responses are contained in appendix I. In addition to its
    written comments, OSHA provided us with technical comments, which we
    incorporated as appropriate.

    OSHA generally agreed with our findings, conclusions, and recommendations.
    The agency asserted, however, that we had based our recommendations on a
    small sample of worksites and that our methodology for selecting
    researchers and specialists was not scientific and was subject to biases.
    We did not base our recommendations on site-specific findings or on
    interviews with researchers and specialists, but rather on programwide
    data. More specifically, our recommendations were based on our analyses of
    OSHA's program requirements and program data as well as the findings and
    conclusions reported in the OSHA-sponsored and Inspector General
    evaluations of these programs that were cited in our report. Although our
    selection of researchers and specialists was, by necessity, judgmental, we
    sought to obtain a broad, balanced range of perspectives and expertise
    about the programs' effectiveness.

    As agreed with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 30 days
    after its issue date. At that time, we will send copies of this report to
    the Secretary of Labor and the Assistant Secretary of Labor for
    Occupational Safety and Health and other interested parties. We will also
    make copies available to others upon request. In addition, the report will
    be available at no charge on GAO's Web site at http://www.gao.gov.

    Please contact me or Revae Moran on (202) 512-7215 if you or your staff
    have any questions about this report. Other contacts and staff
    acknowledgments are listed in appendix II.

    Sincerely yours,

    Robert E. Robertson Director, Education, Workforce, and Income Security
    Issues

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    See comment 1.

      Appendix I: Comments from the Occupational Safety and Health Administration

                                     See comment 2.

    Appendix I: Comments from the Occupational Safety and Health
    Administration

    GAO Comments 1. 	We added information on page 20 to show that OSHA's
    enforcement efforts, as measured by the number of inspections, have
    remained constant or increased slightly each year from 1996 to 2003.

    2. 	We did not base our recommendations on site-specific findings or on
    interviews with researchers and specialists, but rather on programwide
    data.

    Appendix II: GAO Contacts and Staff Acknowledgments

    GAO Contacts

      Staff Acknowledgments

    (130240)

    Revae E. Moran, (202) 512-3863
    Deborah A. Signer, (202) 512-7158

    Carol L. Patey and Christine A. Houle made significant contributions to
    this report in all aspects of the work and Leslie C. Ross assisted during
    the
    information-gathering segment of the assignment. In addition,
    Susan C. Bernstein, Julian P. Klazkin, Lynn M. Musser, and
    Walter K. Vance provided key technical and legal assistance.

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