WORKPLACE HEALTH AND SAFETY (ASBESTOS REMOVAL WORK) COMPLIANCE STANDARD 1996

Transcription

1 Queensland Regulatory Impact Statement for SL 1996 No. 163 Workplace Health and Safety Act 1995 WORKPLACE HEALTH AND SAFETY (ASBESTOS REMOVAL WORK) COMPLIANCE STANDARD 1996 Executive summary Asbestos was used in a variety of workplaces from the 1940s until the early 1970s when the dangers to health inherent in exposure became more widely acknowledged. The adverse health effects associated with asbestos are known to be related to the inhalation of asbestos fibres. Knowledge of the adverse health effects has accumulated with the use of asbestos products in workplaces. Asbestos has been linked to three respiratory diseases asbestosis, mesothelioma and lung cancer and has been causally related to the death of many hundreds of Queensland people. Asbestos is still contained in many thousands of Queensland public and private sector workplaces. The majority of buildings built in the post World War II era up to the mid 1970s are likely to contain some asbestos or asbestos based products used for a variety of functional uses such as fire protection, thermal and acoustic insulation as well as asbestos cement sheeting (AC sheeting) and other decorative purposes. As these buildings age, are remodelled or demolished, the potential for exposure to asbestos fibres exists for the persons who work in or visit these workplaces. It is now considered that the current regulations are inadequate to protect the health of Queenslanders from the dangers associated with asbestos exposure and consequently new subordinate legislation is proposed.

2 2 The objective of the proposed Workplace Health and Safety (On Site Management and Removal of Asbestos) Compliance Standard 1996 is to prescribe ways to prevent or minimise exposure to asbestos if a workplace built on or before 31 December 1979 contains an asbestos product; or an asbestos product is encapsulated at a workplace; or a specified asbestos product is removed from a workplace. This standard does not prescribe ways to prevent or minimise exposure to asbestos used at a workplace. This is proposed to be covered by the Workplace Health and Safety (Hazardous Substances) Compliance Standard The proposed compliance standard is the result of a lengthy tripartite consultative process and has been developed as an initiative of the Workplace Health and Safety Council, which consists of representatives of employers, workers and government. Part 29 (Asbestos) of the Workplace Health and Safety Regulation 1989 (the 1989 regulation) currently regulates some of the issues involving asbestos in workplaces to which the Workplace Health and Safety Act 1995 (the Act) applies. Under transitional arrangements contained in part 17 of the Act, part 29 (Asbestos) of the 1989 regulation will expire on 1 July 1996 unless remade as a compliance standard. In the event that a compliance standard is not made within this time frame, any regulatory protection that provides for the workplace health and safety of persons exposed to asbestos at the workplace would disappear. The proposed compliance standard is required to provide subordinate legislation that is consistent with the Act. Where regulations are subject to sunset provisions of the Statutory Instruments Act 1992, any proposal to continue with them requires the preparation of a Regulatory Impact Statement. The regulatory impact process involves the analysis of alternative options to ensure the proposal is the most effective method of protecting the workplace health and safety of persons in respect to asbestos. In this Regulatory Impact Statement, the options considered were

3 3 remove all form of regulatory control concerning asbestos; or maintain the status quo in relation to the regulatory control of asbestos; or the total elimination of asbestos and substitution with available alternatives; or implementation of the proposed Workplace Health and Safety (On Site Management and Removal of Asbestos) Compliance Standard The analysis undertaken in this Regulatory Impact Statement indicates a continued need for the regulation of asbestos, but it needs to be pertinent to current needs. The existing regulation does not adequately address the ongoing management of in-situ asbestos at the workplace. This particularly relates to the need to impose obligations on employers and self-employed persons to inspect for the presence of asbestos, assess the risk it poses for exposed persons and to control those risks. The analysis shows that the proposed compliance standard is the most cost effective option and that there are clear and positive benefits for the people of Queensland. The proposed Workplace Health and Safety (On Site Management and Removal of Asbestos) Compliance Standard 1996 is therefore recommended. 1. Introduction The Queensland Government has redefined the requirements regarding the development of subordinate legislation by amending the Statutory Instruments Act From 1 July 1995, the development of subordinate legislation requires the preparation of a Regulatory Impact Statement (RIS) under part 5 of the Statutory Instruments Act In accordance with those requirements, the RIS for the proposed Workplace Health and Safety (On Site Management and Removal of Asbestos) Compliance Standard 1996 is now made available for public comment.

4 4 2. Title The proposed subordinate legislation will be titled Workplace Health and Safety (On Site Management and Removal of Asbestos) Compliance Standard Authorising law Under section 38 of the Workplace Health and Safety Act 1995 (the Act), the Governor in Council may make a compliance standard for workplace health and safety to prohibit, or prescribe a way to prevent or minimise, exposure to risk from workplaces, workplace activities or specified high risk plant. The Act imposes workplace health and safety obligations on certain persons and provides that, when a compliance standard is made about a risk, a person can only discharge an obligation for the risk by following the compliance standard. Under section 37 of the Act, this provides a defence to any prosecution about a person s obligation for that risk. 4. Consultation The proposed compliance standard has been developed through a tripartite process initiated by the Workplace Health and Safety Council (the Council). In December 1993, the Council established a reference group consisting of representatives from industry, unions and other interested parties to consider draft regulation covering the in-situ management and removal of asbestos, and comment on the conditions for the issue of a licence for asbestos removal to either an individual or to a body corporate and other matters likely to affect this issue. On 16 August 1994 the Reference Group recommended to Council that a small tripartite working group be established to develop and release a Discussion Paper on the proposed regulations covering work with asbestos. Further, it was recommended that the work of the Reference Group should form the basis of the Discussion Paper.

5 5 The Discussion Paper on Proposals for the Regulation of Asbestos under the Workplace Health and Safety Act was released for public comment in November 1994 and 41 public submissions were made by industry, unions and other interested parties. A tripartite working group made up of representatives from the Division of Workplace Health and Safety, the Queensland Chamber of Commerce and Industry (QCCI), the Australian Council of Trade Unions Queensland Branch (ACTUQ) and the Builders Labourers Federation, was established to consider the issues raised in the public submissions. The working group developed an Intent Statement for the Management of Asbestos as a basis for the proposed compliance standard. The Intent Statement was endorsed by Council in April Policy objectives What is the problem which needs to be solved? Background Asbestos is a mineral rock made out of naturally occurring mineral silicate fibres which belong to either the serpentine or amphibole mineral groups. Mining, milling and processing of asbestos into manufactured products creates many very small fibres. Asbestos was used in a variety of workplaces from the 1940s until the mid 1970s when the dangers to health inherent in exposure became more widely acknowledged. Exposure1 to asbestos fibres has been causally related to the death of many hundreds of Queensland people. Asbestos is still contained in thousands of Queensland public and private sector workplaces. Some indication of the extent of its application can be appreciated from reference to the results of Asbestos An Inquiry Usage in Victoria, Substitutes and Alternatives (1990), an inquiry conducted by the Victorian Occupational Health and Safety Commission (the Victorian Inquiry). The Victorian Inquiry found that types of usage occur in the community and recorded 3000 individual uses, of which the major use was either as insulation or building product. 1 Exposure to asbestos occurs if a person absorbs, or is likely to absorb, asbestos by inhalation.

6 6 The range of applications included reinforcing in asbestos cement sheeting, as an insulator on pipes and in buildings, as a fire retardant in textiles and as a filtering material in the chemical and food industries. In view of the wide usage of asbestos, the adverse health effects from exposure to asbestos fibres have been identified in a range of occupations such as clerks, engineers, labourers, plumbers, plasterers and waterside workers. Due to the acknowledged adverse health effects from asbestos exposure, concerted efforts have been made to eliminate its use through the substitution of other materials. As a result, there is virtually no current application of asbestos or asbestos products.2 An exception is in the use of automotive friction materials such as brake pads, drum linings and industrial gaskets, but substitutes are gaining acceptance. The other area of concern is asbestos materials contained in buildings, structures and plant, commonly referred to as in-situ asbestos. The majority of buildings built in the post World War II era up to the mid 1970s are likely to contain some asbestos or asbestos based products used for a variety of functional uses such as fire protection, thermal and acoustic insulation as well as asbestos cement sheeting (AC sheeting) and other decorative purposes. As these buildings age, are remodelled or demolished, the potential for exposure to asbestos fibres exists for employers, self-employed persons, and workers who work permanently in these buildings employers, self-employed persons, and workers who work on remodelling, maintenance, or demolition of these buildings members of the public who visit these buildings. The health effects from exposure to asbestos fibres Inhalation of asbestos fibres has been linked to three respiratory diseases asbestosis, mesothelioma and lung cancer. Exposure may also relate to other cancers, however, there is no conclusive evidence to support 2 Asbestos product means anything that contains asbestos.

7 7 this association. The 3 identified diseases are characterised by long latency periods, that is, years from exposure to the onset of disease. Asbestosis is a chronic lung disease that can lead to respiratory impairment and to diseases such as lung cancer. It results from the inhalation of asbestos fibres which are deposited in the lungs causing scar tissue. The pulmonary changes resulting from the scar tissue are irreversible. It has been found to occur in workers exposed to prolonged and heavy concentrations of asbestos fibres. Asbestosis cannot be effectively treated. Mesothelioma is a rare cancer. There are 2 types of mesothelioma pleural which is tumour of the lung, or peritoneal, which is a cancer of the abdominal cavities. The higher the level of exposure the greater the risk of developing mesothelioma. However the level of exposure does not affect the length of the latency period which is usually between 30 and 40 years, before the onset of the disease. Mesothelioma cannot be effectively treated. Most persons diagnosed as having the disease die within 12 months of diagnosis. Australia has one of the highest rates of mesothelioma in the world and is currently experiencing an epidemic of the disease. The Australian Mesothelioma Register reports a total of 514 mesothelioma notifications in Queensland for the period or 16.3 percent of the 3153 cases reported in Australia. Lung cancer is not specifically associated with asbestos. Individual lung cancers caused by asbestos cannot be distinguished from those cancers that are caused by other agents such as tobacco smoke. While persons who have been exposed to asbestos and develop lung cancer are usually tobacco smokers, it is generally accepted that asbestos is capable of causing lung cancer, and the tumour may develop where there is no co-existing asbestosis. Lung cancer related to asbestos exposure usually has a latency period of 20 to 40 years between the first exposure and the onset of cancer. What are the risks to be controlled? Exposure to asbestos fibres can cause death and therefore exposure is the risk which must be controlled. Today the principal source of exposure to asbestos fibres in Queensland exists in buildings or other structures built

8 8 before In particular, exposure to asbestos fibres can occur from the release of asbestos fibres through renovation, maintenance or demolition accidental contact with the asbestos containing material causing fibres to break free failure to adequately maintain an asbestos containing material thereby allowing release of asbestos fibres. Have the key stakeholders done everything in their power to control the risk? Government The regulation of asbestos was first raised in 1968 when representations were made to the then Department of Labour and Health Department, by the Amalgamated Society of Carpenters and Joiners and the Building Trades over concerns of the adverse health effects from exposure to asbestos. The unions cited overseas studies linking the use of asbestos with mesothelioma in workers. Following an investigation of these concerns the Health Welfare and Safety Board established under the Factories and Shops Act 1960, found that the increasing use of asbestos in industry justified the making of a rule for factories and shops and to buildings under construction where asbestos was being used. The use of asbestos was first regulated by the Government of Queensland in 1971 when the Asbestos Rule (Rule No. 9) was made under the Factories and Shops Act The Asbestos Rule set out the duties of occupiers, the use of exhaust ventilation, personal protective equipment and requirements for medical examinations. Currently, part 29 of the Workplace Health and Safety Regulation 1989 covers the use, handling and removal of asbestos but is now considered inadequate to provide clear direction in the requirements needed for the management of in-situ asbestos. Business Any accurate assessment of how business is currently controlling the risk will ultimately be judged from morbidity and mortality records years from now. While it is without doubt that many businesses are

9 9 doing the right thing, many complaints in relation to asbestos are still received by the Division of Workplace Health and Safety Inspectorate. An indication of whether business is doing everything in its power to control the risk can be drawn from a brief analysis of the types of situations encountered and the comments made following investigation asbestos fibres have been circulating as dust in the atmosphere of the lodge. Persons living in the area are at risk asbestos has not been removed and disposed of in an acceptable way asbestos in ceiling not adequately encapsulated asbestos-cement sheeting wilfully broken during demolition no demolisher on site asbestos not being disposed of properly no evidence of specific work procedures to remove asbestos sheeting no personal protective equipment for work with asbestos provided shopping arcade work being performed that may have disturbed asbestos asbestos roof sheeting cleaned by using a water jet. Community Current legislative provisions put the onus on employers to protect workers from exposure to asbestos at the workplace. Under the Act, workers are required to use personal protective equipment provided by their employer, however, personal protective equipment is regarded as the least desirable way to control exposure to asbestos, except in circumstances where work involves encapsulation or removal. Workers and other persons at risk are usually unaware of the presence or condition of asbestos in areas where they work or visit, and therefore are totally dependent on the employer or self-employed person at the workplace to protect them from the risk or to provide personal protective equipment. Much of the burden of controlling the risk from asbestos has been carried by workers through their representative unions. Historically, many unions have taken the initiative by developing their own asbestos policies

10 10 for the protection of their members. By drawing up these policies, unions in the building industry for example, are now in a better position to ensure safe work practices across their industry by informing workers of the risks involved and actively promoting consultation at the workplace. Is there a compelling case for Government involvement on the grounds of health and safety? At both the national and international level, there is recognition that the risks associated with uncontrolled exposure to asbestos are unacceptable. The risks associated with asbestos are unacceptable when a person who is responsible for creating the risk ignores the harm imposed on another person a person is unaware that they are exposed to asbestos a person in control of, or exposed to the risk lacks information to make informed decisions and take appropriate action the task can be performed by using safer work practices or technology the risk is inflicted on vulnerable parties, who ought to be protected. The proposed compliance standard provides a means to reduce these unacceptable risks and therefore there is a strong case for Government regulation on the grounds of public health and safety. What would happen if Government does nothing, that is, what is the worst possible consequence of Government inaction? The nature of the risks posed by exposure to asbestos requires employers and self-employed persons to conduct a risk assessment process and adopt control measures which may vary from complex to simple. It cannot be readily assumed that employers or self-employed persons will always be willing to adopt such control measures in the absence of specific regulatory control.

11 11 Given the risks associated with exposure to asbestos and the control measures required to ensure workplace health and safety, it appears inappropriate for Government to rely exclusively on education and voluntary compliance as a means of ensuring that industry adopts appropriate workplace health and safety standards. If the Government does not provide specific regulatory control for asbestos it abrogates its responsibility for providing a framework that provides some protection for the health and safety of workers and members of the public who may be affected by workplace activities. It also removes certainty for employers and self-employed persons who are responsible for identifying and managing exposure to asbestos risks at the workplace. Under current legislative transitional arrangements, part 29 (Asbestos) of the regulation will automatically expire on 1 July 1996 unless remade as a compliance standard. In the event the proposed compliance standard is not made within this period, any regulatory protection for the health and safety of employers, self-employed persons, workers and members of the public exposed to asbestos at workplaces disappears. 6. Legislative intent What does the proposed legislation do, that is, what rights, obligations or circumstances does it change or establish? The proposed compliance standard for on site management and removal of asbestos supports the Act and will also be an integral component of the comprehensive legislative framework being developed to prevent or minimise the exposure to hazardous substances. The specific objective of this proposed compliance standard is to prevent or minimise the exposure of employers, self-employed persons, workers and other persons at the workplace to asbestos. It will create certainty for those persons with workplace health and safety obligations under the Act, as to how they can discharge their obligations in relation to the risks associated with exposure to asbestos at the workplace. The proposed compliance standard places obligations on employers

12 12 self-employed persons principal contractors asbestos removalists. The proposed compliance standard establishes requirements for the inspection of workplaces, the conducting of risk assessments and the keeping of records. It also establishes provisions for the control of exposure to asbestos fibres through on site management or during removal. Employers and self-employed persons will be required to inspect for asbestos product (other than asbestos building product3) conduct assessments of the risks to health and safety of persons from any asbestos product (including asbestos building product), where it is identified through inspection or is otherwise known to be present at a workplace keep assessment records and make them available for inspection by any person who works, or is likely to work at the workplace ensure that asbestos product is encapsulated or removed when risk assessment shows a person may be exposed to asbestos ensure that a person at a workplace, where encapsulation has occurred, is not exposed to asbestos or where that is not reasonably practical, ensure exposure does not exceed the national exposure standard keep a register and allow a person who works, or is likely to work at the workplace to inspect the register, when asbestos product has been encapsulated 3 Asbestos building product means asbestos cement sheeting, asbestos coated metal sheeting and any other thing containing bonded asbestos, other than bonded sprayed sheets.

13 13 ensure that where the removal of specified asbestos product4 is required, an asbestos removalist is engaged and that persons at the workplace or near the workplace are notified of the removal. Principal contractors for a construction workplace will be required to control exposure to asbestos when asbestos product is encapsulated keep a register when asbestos product has been encapsulated. Removalists will be required to give notice to the chief executive at least 5 days before removal conduct risk assessments keep assessment records isolate the removal area implement control measures monitor for the release of asbestos fibre. How will that work in practice, that is, what is the overall effect expected to be? The key components of the proposed compliance standard for on site management and removal of asbestos are 1. the assessment of the risk posed by the presence of asbestos; and 2. control of exposure. The assessment of risk will be achieved by ensuring identification of the presence of asbestos product at a workplace; and a risk assessment is completed to determine if a person may be exposed to asbestos at the workplace. 4 Specified asbestos product means, in the case of AC sheeting or asbestos coated metal sheeting, 200 m 2 or more, and for other types of asbestos product, the amount that fits into a bag (a glove bag) less than 1 m wide and 1.5 m deep.

14 14 Control of exposure will be achieved by prescribing requirements in regard to encapsulation or removal following risk assessment if a risk assessment reveals persons at a workplace which contains asbestos are not exposed to asbestos, the assessment must be repeated if alterations are made to the workplace or changes to workplace activities occur the provision of registers to enable workers at the workplace or visiting employers, their workers, and self-employed persons to be aware of the presence of asbestos and take appropriate precautions to prevent exposure. The overall effect is to provide a standard that will prevent or minimise the risk of exposure to asbestos at a workplace or from a workplace activity, to employers, self-employed persons, workers and members of the public. How does this contribute to the achievement of the overall objective of the legislation proposed? The proposed compliance standard supports the process of regulatory review by replacing part 29 and providing subordinate legislation in keeping with current workplace asbestos exposure risks. The provisions of the proposed compliance standard provide protection for workers and other affected persons by regulating the exposure to asbestos at and from workplaces. Why is the legislative approach reasonable and appropriate? There is no cure for the adverse health effects caused from exposure to asbestos. Prevention or minimising the risk of exposure is the only way of ensuring health and safety. The proposed compliance standard will become the primary source of regulatory direction for on site management and removal of asbestos in Queensland and will provide a method through which exposure to asbestos may be avoided and enable persons to discharge their obligations under the Act.

15 15 The proposed compliance standard provides a reasonable approach to preventing and minimising exposure to asbestos in-situ5 or from any removal or encapsulating process. The existing codes of practice provide guidelines on monitoring and removal of asbestos. 7. Consistency with authorising law How would the proposed legislation contribute to the achievement of the overall objective of the authorising legislation? Overall, the proposed compliance standard for on site management and removal of asbestos has been drafted to provide subordinate legislation consistent with the Act. The overall objective of the Workplace Health and Safety Act 1995 is to ensure freedom from disease or injury to persons caused, and the risk of disease or injury to persons created, by workplaces, workplace activities or specified high risk plant. The proposed compliance standard seeks to prevent or minimise the risk of adverse health effects and fatalities that can occur as a result of exposure to asbestos at work. Enforcement of the proposed compliance standard The Division of Workplace Health and Safety will have the responsibility for enforcing the proposed compliance standard. It will be enforced by inspectors primarily through issuing improvement notices that require corrective measures to have been implemented by a certain date issuing prohibition notices that can stop an activity or plant being used where it is considered an immediate risk to workplace health and safety exists prosecution failure to comply with the requirements of the proposed compliance standard means that a person has failed to meet his or her obligation under the Act. A person who breaches 5 in-situ means in the original site or position.

16 16 an obligation can be prosecuted. The maximum penalty for this is $ or 6 months imprisonment for an individual. The maximum penalty for a body corporate is $ Options and alternatives What are the alternative ways of achieving the policy objectives of the subordinate legislation (including the do nothing option) and why were they rejected? There were 4 options considered that potentially provided a means of achieving the policy objectives of the proposed subordinate legislation Option 1 Option 2 Option 3 Option 4 The removal of regulatory control for asbestos; or Maintain the status quo through the continued application of the current regulation for asbestos by re-making part 29 of the 1989 regulation; or Total removal of asbestos and substitution with available alternative products; or The implementation of the proposed compliance standard for on site management and removal of asbestos. Option 1 no regulatory control (not preferred) With the removal of any form of regulatory control, it would be left to employers, self-employed persons, workers and their representatives to interpret the differing information provided about exposure limits for asbestos and develop systems of work appropriate to the risk. There are many workplaces in various industry sectors in which workers carry out work unaware of the presence of, or the levels of asbestos to which they are exposed. Some of these workplaces, due to economic circumstances, may make decisions that subject their workers and workplace visitors to unacceptable risks associated with asbestos exposure. Under these circumstances it could be expected that considerable differences in levels of willingness and competence to comply with the national exposure limit for asbestos could occur.

17 17 This would mean that there would be no consistent approach to the management of exposure to asbestos in Queensland workplaces and no consistent advice to persons to meet their obligations under the Workplace Health and Safety Act 1995, when workplaces expose persons to asbestos. A report commissioned by the Division of Workplace Health and Safety in 1994 regarding the development of an industry inspectorate contact and facilitation program, indicated that businesses generally fall into four groups that complied with their health and safety obligations with differing levels of willingness and competency. One group was found to ensure the health and safety of workers and others only when Government regulated that they do so. Based on that report, it could be expected that following the removal of any regulatory control for asbestos, there would be an increase in the number of employers and self-employed persons who would not safeguard the workplace health and safety of themselves, their workers and workplace visitors because of the costs involved. For industry, the only reduction in cost would accrue to these businesses. This must be offset against any costs incurred by industry as a whole arising from factors such as increased rates of workplace exposures and resulting disease, lost productivity and industrial disputation. These costs would also unfairly accrue to those businesses who voluntarily control exposure to asbestos. The option of removing any form of regulatory control for asbestos is not preferred for the following reasons the Queensland Government would breach its commitment to the national occupational health and safety reform process asbestos control and removal has been subject to regulatory control for many years in Queensland, other states and most western nations there is a level of uncertainty about the possible outcomes of this option, however, there exists the real possibility of lower rates of voluntary compliance. Whether this lower rate of compliance results from inadequate information or a deliberate act is of no consequence in the context that it will lead to an increase in workplace exposure and as a result, the real possibility of an increase in rates of adverse health effects and fatalities, with no offset cost saving.

18 18 Option 2 status quo continuation of current form of asbestos regulation (not preferred) Part 29 (Asbestos) of the 1989 regulation could be re-made into a compliance standard. This action would provide subordinate legislation that is consistent with the Workplace Health and Safety Act 1995, but would not provide a framework for dealing with current areas of asbestos exposure, nor would it be in keeping with the national approach to the management and control of hazardous substances. The main areas of current potential exposure relates to asbestos in-situ and the removal of asbestos products from buildings, structures and plant. Employers, self-employed persons and workers engaged at the workplace or in the demolition or refurbishment of buildings and structures could potentially be exposed to risk if there is no requirement to assess the building or structure for the presence of asbestos or the risk it poses. Persons who undertake routine maintenance in buildings and structures also have the potential for exposure to asbestos fibres and to unwittingly expose others if they are not aware of the presence of asbestos. Current requirements are not specific on the need to inspect for the presence of asbestos or the management of exposure when asbestos is found. Option 3 total removal of in-situ asbestos (not preferred) The greatest amount of asbestos in Queensland is contained in both public and private sector buildings, plant and structures. Based on the findings of the Victorian Inquiry the option of total removal of asbestos in Queensland in a short period would be difficult to achieve because of the enormous cost involved. Some of the findings of the Victorian Inquiry, detailed below are also relevant to the Queensland situation and have influenced the lack of support for this option. The cost of total asbestos removal would be difficult to quantify due to the lack of information on the amount and nature of asbestos in-situ and the probable wide variation of removal requirements at individual workplaces. The estimation of cost would be made up many factors including the following components cost of assessment inspections, expert advice, monitoring

19 19 administration costs organising removal, temporary relocation, plant and equipment down time, production scheduling removal costs removal by specialist, air monitoring down time cost associated with down time of plant, workers wages where relocation is not possible, lost production substitution cost of replacement materials sales loss delays in product supply may force customers to purchase overseas or interstate. Removalist contractors, after initially embracing the total removal option, considered that the cost of total removal would be too great to do it all at once. They also considered that total removal, even over a 10 year time frame, would create too much pressure on contractors, increase prices and cause an overheated market. They believed that total removal in the short term would encourage sub-standard operators into the business, thereby placing workers and others at risk of exposure to asbestos. Some indication of the enormous cost to Queensland of total removal option can be appreciated from some broad estimates provided by Austa in regard to power stations controlled by the Electricity Industry. They estimate the cost of removal of asbestos product and asbestos building product from stations would be $22.5 M. For 1 power station, total removal and replacement would mean ceasing production with resultant alternative generation costs and rebuilding costs estimated to be $ 1.5 Billion. There is an argument that failure to totally remove asbestos at this time simply delays the cost from this generation to the next. However, it is equally argued that this generation should not bear the total cost of the mistakes of previous generations, when the cost of asbestos removal may be more equitably shared. Option 4 provides a compromise and is therefore preferred.

20 20 Option 4 Implementation of the proposed Workplace Health and Safety (On Site Management and Removal of Asbestos) Compliance Standard 1996 (the preferred option) Methodology The methodology used to access the benefits and costs of implementing the proposed compliance standard was developed by the Department of Business, Industry and Regional Development (DBIRD). This approach is in accordance with Cabinet s decision of August 1994, which requires the application of this methodology to all new significant subordinate legislation. The methodology is a four stage process which demonstrates the qualitative or intangible and quantitative dollar-value impacts of the proposed compliance standard across some 80 financial and socioeconomic issues from the perspective of the stakeholder groups, Government, Business and the Consumer/Community. The analysis of the cost of the proposed compliance standard is underpinned by some basic assumptions that are outlined below. Time Frame The analysis is undertaken over a 10 year time horizon. While this period is consistent with the sunset provisions for Queensland subordinate legislation a quantitative analysis in relation to asbestos, over this period, will always result in a negative net present value. The reasons are due to the long latency, estimated to be years, between exposure and the onset of adverse health effects. This means that all costs will accrue in the 10 year time horizon but financial benefits will not be realised for years. Discount Rate Calculations undertaken in this analysis are in 1995 prices. As identified costs extend beyond 1995 it is necessary to use a discount rate to arrive at a net present value. The discount rate used in this analysis is the Queensland Treasury rate of 6 per cent.

21 21 Workplaces Containing Asbestos The Australian Bureau of Statistics report on Profiles of Australian Business indicates that there were approximately employment locations in Queensland as at August To arrive at a figure that reflects the number of private sector locations to which the proposed compliance standard will apply, it is necessary to deduct the following public sector buildings (as advised by the Department of Administrative Services Asbestos Management Unit) rural workplaces mining locations. There are other reasons why this figure should be further reduced. First, the usage of asbestos in buildings largely ceased in the late 1970s. Secondly, an unknown number of locations have either had asbestos removed because of refurbishment or because of union work bans. The Victorian Occupational Health and Safety Authority in their Regulatory Impact Statement on Asbestos Regulations 1991 (Victorian RIS) estimated that approximately 25 percent of locations are therefore asbestos free. By applying this estimate to the Queensland situation the number of possible private sector locations can be further reduced to For the purposes of this analysis it is therefore assumed that the number of locations that potentially contain asbestos are public Sector workplaces private Sector workplaces Based on the scenario presented above, the impacts, both tangible and intangible, on Government, Business and the Community from the proposed Workplace Health and Safety (On Site Management and Removal of Asbestos) Compliance Standard 1996 identified in the analysis are detailed below.

22 22 9. Costs of the proposed compliance standard Costs will primarily be incurred through Business inspection of buildings built prior to 1980 for the presence of asbestos risk assessment of the risk to health and safety at the workplace from asbestos control of exposure by encapsulation or removal of asbestos. Workplace inspections The proposed compliance standard requires all employers or self-employed persons to inspect the workplace for the presence of asbestos product (other than asbestos building product), within 2 years of the commencement of the compliance standard. It is anticipated that this task will be undertaken by the employer or self-employed person or by persons doing routine building maintenance. As such, it is considered there will be no significant costs involved for the majority of workplaces. However, it is conceded that in some situations, the inspection process may require the hiring of expert consultants. Risk assessment The proposed compliance standard requires that employers and self-employed persons assess the risk to the workplace health and safety of a person who works, or is likely to work at the workplace, from exposure to asbestos. Therefore the need to conduct assessments can arise under 2 sets of circumstances 1. If, following the inspection of a workplace for the presence of anything containing asbestos (other than asbestos building product), it is found the workplace contains asbestos. An example of the presence of asbestos is friable asbestos used in insulation for piping. 2. If an employer or self-employed person at a workplace is aware, because of the inspection or through other means, the workplace contains an asbestos building product. An example of an asbestos building product is AC sheeting.

23 23 In regard to asbestos (other than asbestos building product) requiring assessment the Queensland Asbestos Removal Contractors Association (the Association) provided a broad estimate that 10 per cent of workplaces built prior to 1980 could contain asbestos product (other than asbestos building product). By using this estimate approximately private sector business locations would require assessment. The association also advised that the average cost of a risk assessment is $450. As it is not known how many of the private sector locations actually contain asbestos, this analysis relies on the broad estimate provided by the Association. Assuming 10 percent (7 300 locations) contain asbestos product, the cost of assessment will be $3.29M. This cost will be incurred within the first two years of the commencement of the proposed compliance standard. In regard to asbestos building product requiring assessment the Association advised a broad estimate that 90 percent of workplaces built prior to 1980 would contain some asbestos building product AC sheeting. That means workplaces would potentially require an assessment. The proposed compliance standard only requires risk assessment in this instance if the employer or self-employed person is aware of the presence of asbestos building product. Awareness may occur following the inspection for asbestos product (other than asbestos building product) or through other means such as advice from a tradesperson. It is also possible that workplaces would already require assessment from the first set of circumstances and hence double counting could occur. The number of workplaces needing risk assessment is not able to be reliably estimated. However, it is assumed that in the vast majority of workplaces the risk assessment process will involve no more than inspection to identify that AC sheeting is in a stable and undamaged condition. If the assessment identifies that the sheeting is damaged or likely to deteriorate, a decision would need to be made as to whether it poses a risk to persons. Because of the difficulty of estimating the number of workplaces with unstable AC sheeting, no attempt has been made to quantify the cost under these circumstances. Reviewed risk assessment Where a significant change to the workplace occurs, or a significant change in work activity is carried out at the workplace, the proposed

24 24 compliance standard requires that the risk assessment be reviewed. An example of this could be in circumstances where some decorative sheeting is removed exposing insulation containing friable asbestos. It is not considered reasonable or practical to estimate the number of instances when this will occur and therefore the costs have not been quantified in this analysis. Control of risk In regard to asbestos product (other than asbestos building product) where the assessment indicates that a person may be exposed to health and safety risks from asbestos, the employer or self-employed person must ensure, as soon as is reasonably practicable, the asbestos product is encapsulated or removed. The Association agrees with the $ average cost of removal estimated by the Victorian RIS. The Victorian RIS also estimated encapsulation costs were approximately 30 percent of the cost of removal ($4 500). The Association believes that encapsulation is a short term solution that could expose maintenance workers and workers at the workplace to risk of exposure due to accidental disturbance of encapsulated asbestos. Total removal from all workplaces was addressed in Option 3. No actual numbers are available on the proportion of locations that contain asbestos product that will need to be removed or encapsulated following risk assessment. For the purposes of this analysis, three scenarios used in the Victorian RIS were applied to the Queensland situation. The cost of control from each scenario is based on the relevant percentage of locations estimated earlier as likely to contain asbestos product, $ for the average cost for removal and $4 500 for encapsulation. These scenarios give percentages of locations that will require control measures. These percentages are A. 20 percent locations B. 35 percent locations C. 50 percent locations.

25 25 It is also assumed that within each percentage scenario 50 percent will choose encapsulation and 50 percent will choose removal. From the scenarios the cost of control is estimated as Scenario A Scenario B Scenario C $14.24M $24.96M $35.59M. In regard to asbestos building product the costs of control have not been quantified because it could only be based on extremely subjective estimates and therefore would not contribute to this analysis. This decision was made after consideration of the following While it has been estimated earlier that approximately private sector workplaces may contain AC sheeting, there is no reliable method to estimate the number of those workplaces where AC sheeting poses a risk to persons nor to estimate the extent of sheeting in at those workplaces. AC sheeting, if undamaged, will generally outlast the life span of the buildings. Awareness of its presence and the keeping of a register that is available to workers controls the risk of accidental exposure. If AC sheeting is damaged, it is the extent of the damage that will determine the cost of risk control. These costs may vary from very minor in cases where small damage has occurred and requires repair through the application of a sealant paint, to the other extreme where damage is extensive and removal and substitution is necessary. Estimates of removal costs range from $15 $30 per m2 and replacement with a substitute is estimated at twice the cost of removal. In most cases removal will only be undertaken when a designated risk level is reached, or because of refurbishment or the building has outlived its lifespan and needs to be demolished. It is only in situations where the amount of AC sheeting equals or exceeds 200 m2 that costs will be incurred through the engagement of an asbestos removalist to perform the work. Record keeping Employers and self-employed persons will be required to keep assessment records and a register showing the location of encapsulated

26 26 asbestos at the workplace for 30 years. There are also record keeping requirements placed on principal contractors and asbestos removalists. It is assumed that these requirements will not incur any substantial costs. Other related costs There are also other costs involved in asbestos removal, such as management time in relocation, plant downtime etc, that have not been possible to quantify in this analysis. The nature of these unquantified costs were discussed in Option 3 total removal. Government An Asbestos Management Unit (the Unit) within the Administrative Services Department was appointed by Cabinet in February 1993 as the Queensland Government Authority for asbestos related issues. Some indication of the cost of the proposed compliance standard for Government can be appreciated from an estimate provided by the Unit of the resources required to identify asbestos containing materials, provide an assessment of health risk, and to implement a management plan for each building to ensure that these materials do not constitute a risk to health. These estimates include hospitals as a priority area but do not include Queensland Transport (including Railways), housing and local government. The projected costs of this program were estimated at $19.325M over a five year period, and were based on buildings currently listed on the Q-Build asset register plus hospitals. An amount of approximately $1M has already been expended in 1994/95. This figure includes the urgent removal of any asbestos containing materials assessed to be of immediate danger to persons. This amount has been budgeted for and will be spent irrespective of the introduction of the Compliance Standard. The Unit also advised that continuous monitoring of in-situ asbestos over an additional 5 year period will undoubtedly lead to the requirement for further removal during this period. They broadly estimate that this will cost an extra $16M. Similarly, whilst not specifically budgeted for, expenditure in this regard will be made irrespective of the introduction of the Compliance Standard.

27 27 Community Workers are not likely to incur any cost. It is possible that business may pass on incurred costs to consumers, however, competition from businesses that incur no expense from the proposed compliance standard should ensure this is minimal. Some domestic dwellings will contain asbestos building product (AC sheeting). Under most circumstances, the application of the proposed compliance standard would not apply to domestic dwellings. Only buildings that necessitate the removal of 200 m2 or more of asbestos sheeting will require the removal to be carried out by an asbestos removalist. The total area of 200 m2 will exclude the vast majority of domestic dwellings and as such should not incur cost for the majority of consumers. 10. Benefits of the proposed compliance standard Business The main benefits of the proposed compliance standard are shorter time frame required for notification of removal of asbestos clearer expression of government requirements reduced risk to health of workers and workplace visitors reduced industrial disputation potential for reduction in long term compensation costs reduced business disruption short term increase in employment due to the requirement for assessments. Government The proposed compliance standard will ensure the Government continues to meet its stated policy objective to ensure freedom from disease