December 5, 2018

4 ways Due Diligence is Misunderstood in Safety

It does not mean simply gathering large amounts of records.
Due diligence is a phrase that gets bandied about in the world of health and safety as if safety people invented it.
The truth is it’s one of the most misused phrases and misunderstood concepts in the Canadian safety community. It is an excuse for the bureaucratization we see in modern safety because it is consistently misinterpreted.
It was not a safety case
In November 1970, the city retained a company to manage the disposal of all garbage from the city. The landfill site selected bordered on a creek which ran into a river. This was a sanitary landfill where the garbage is compacted layers and covered each day with actual sand or gravel.
Before becoming a landfill, the site had some freshwater springs that flowed into the creek, which emptied into the river. The contractor covered the site with material and then placed the garbage and waste over the top. Over the course of time, the garbage formed a mound that sloped steeply towards the creek. As a result, the creek was polluted.
Due diligence was already established
The court also discussed the “absolute liability” offense, where the Crown simply has to show that a prohibited act was committed.
Also addressed was what the court termed “public welfare offenses” which is part of the English common law. There was a bit of crossover between the absolute liability offense and the public welfare offense. An example given by the court was the Alberta Highway Traffic Act which provided that a judge could find a violator not guilty if the offense was “committed only by accident or misadventure and without negligence and could not by the exercise of reasonable care of precaution have been avoided.”
Due diligence?
In rendering its decision, the Supreme Court of Canada defined the scope of the due diligence defense. It was made clear that the burden of proof would shift from the prosecution to the defendant, and that it was up to the defendant to demonstrate that they had been duly diligent.
Due diligence and safety
I started off saying that due diligence was misunderstood by many people in the safety field. One only needs to look at rooms full of boxes filled with “due diligence records.”
Most ignore the part of the definition that talks about the reasonable belief in a mistaken set of facts. This means that someone who is an expert has provided some advice or direction that a reasonable person would understand and believe. The problem is that, in safety, it is unclear who is an expert and upon whose advice you can rely.
The final arbiter of who is an expert is usually established in court through a process called voir dire. This would allow prosecutors or lawyers to challenge the credibility of any witness brought forward as an expert.
Is important to realize that the courts are the only real judge of due diligence. No person outside of a courtroom can really guarantee that the company is duly diligent. This leads us to a key statement. A company must have a system in place to prevent the commission of an offense and take reasonable steps to ensure that system is operating.

Due diligence is actually meant to be activity-based. That means ensuring that your system is operating, not that records are being kept of questionable activities.

Boxes of documents may give us comfort. They can also be proof that the company has not exercised, or is not exercising, reasonable care.
We ignore risk in favour of hazard as this is the term that appears in legislation. Having a system, and ensuring its operating, does increase safety and does prevent incidents.

Due diligence is about ensuring that you have an active system that is being effective, not about filling boxes with paper. Due diligence is not about trying to prove you have it, but actually acting and working with reasonable care.

About the author: Dave Rebbitt, Consultant and President, Rarebit Consulting.

Dave is President of Rarebit Consulting and has been in safety for 30 years and has led many innovations in safety. He is the most published author, on safety, in Canada publishing safety articles in international peer-reviewed journals and writing online blogs. He is also the author of Effective Safety Committees.

He continues to speak at various conferences and venues on management and safety. He is also engaged in course development and instruction at the University of Alberta OHS certificate program.

Dave holds a master’s degree in business administration and completed the first international research project on safety professionals in 2012. He also sits on the Board of Governors for the board of Canadian Registered Safety Professionals. Dave is also a veteran, having served over 20 years in the Canadian Forces in various capacities, including safety.

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