Does safety pay the case of coal mining

The coal mining industry offers a useful illustration of the limitations of the view that safety pays —of the view that economic self-interest provides an effective incentive to companies to improve occupational health and safety. There are two strands to the safety pays argument. The most familiar is the notion that workers compensation costs provide significant safety incentives. In the first part of this chapter I shall explore in some detail the limitations of this notion in the context of coal mining and argue that safety in this industry depends as much or more on government intervention. 

But the safety pays approach is not restricted to the question of compensation costs. The second strand of the argument is that safety enhances productivity. This proposition has been advanced with particular insistence in relation to coal mining, and the latter part of this chapter will be devoted to scrutinising the claim in this context. 

Eastern Colliery converting LTIs to injuries without lost time 

Let us start by looking at the practices of one underground coal mine in New South Wales, which I shall call Eastern Colliery. Eastern is not alone in these practices, but just how widespread they are carmot be known on the basis of a single case study. Eastern ranks in the best-performing quartile of NSW imderground mines in terms 

Eastern also runs an incentive scheme to encourage workers to act safely and to avoid lost-time injuries. Each miner who goes a year without a lost-time injury (LTI) is rewarded with 250 and any shift which goes three months without an LTI is similarly rewarded. Injuries which do not result in lost time are ignored for the purposes of these rewards. 

---