Do you know how many sub-contract workers you have working on site? How many contractors are working for tier -two, three or four suppliers? Just what visibility and control do you have of your supply chain and what risks are you exposed to in regards Health & Safety compliance of second or third-tier suppliers who may be visiting your sites on a daily basis? What would be the consequences and liabilities of a fatal accident caused by, say, a tier-three sub-contract worker?

Unfortunately, for far too large a group of buyers the answers to these questions is – ‘I don’t know’. Perhaps, even worse, are the numbers of those under the misapprehension that their principal contractors shoulder the risk commercially or criminally.

According to statistics compiled by the UK’s Health and Safety Executive in 2008/09 there were 53 fatal injuries in the UK construction sector – the rate of major injury in construction is the highest of any main industry group (254.1 per 100,000 employees in 2008/09). Most procurement professionals are adept enough to ensure that principal contractors are compliant with Health and Safety working practices and legislative requirements, but trust principal contractors the responsibility for accidents caused by sub-contractors.

Many buyers are unaware of the changing attitude of those in authority to the responsibilities of the buyer. Those doing the purchasing are now expected to not only check for proof of a supplier’s compliance to Health & Safety requirements, but are expected to monitor their status – and that’s across the entire supply chain, down through all the tiers of sub-contractors. Increasingly, the burden for compliance is being shifted from the provider of goods or services to the procurer, as demonstrated by the new European Directive on chemical safety (the so-called REACH  Directive) which demonstrates the increasing trend to shift responsibility to the ultimate buyer.

The dangers that exist here are many. Accidents are not only shocking and damaging to the reputation of a buying organisation, but are costly and cause delays. However, beyond this, litigation can be a consequence, with directors being exposed to prosecution if correct procedures have not been followed or if negligence is suspected.

With such a heavy burden of risk now lying with the procurer, what can be done to mitigate these very real and potentially, highly damaging risks?

Those procuring services must gain a greater visibility of their supply chain, through all the levels of supplier and sub-contractor relationships, to ensure full control over what happens on their own premises or within their sphere of influence. They must get closer to, and co-operate more closely with, principal contractors on a continuous and ongoing basis to take control of the process, beyond the signing of the contract.

Importantly, a sub-contractor should be treated in the same way as you would a principal contractor. You forward the responsibility for Health & Safety issues on to your sub-contractors, but by using the same methodology as you use towards your principle contractor, so that you can ensure that all the way down the chain you maintain the same standards. This can be achieved through contractually ensuring that principle suppliers select only sub-suppliers that are pre-qualified, independently audited and monitored on a continuous basis.

Very often the purchaser needs to demonstrate not only that they take health and safety issues seriously themselves but have a systematic approach to ensuring that those people who act in their name do so as well. Even if they avoid the dangers of litigation, fines or other sanctions there is the real risk that they will be exposed as a company who put profit before social responsibility and who demonstrate a cavalier regard for public safety. Such claims can be extremely damaging for the long term health of the business.

Ensuring that compliance is complete across all tiers of the supply chain and throughout thirty, forty or even fifty sub-suppliers may appear a daunting task. But it’s essential for the many companies that may be oblivious to the risks, to wake-up to the realisation that the dangers from the non-compliance of a third-or forth-tier supplier on a site under their control could be devastating. Those doing the buying need to tackle this serious issue by using the tools and information available to them, and by working in collaboration with the supplier community, to take control of their full sphere of responsibility.

Per Karschowski is Regional Director for Western, Central and Eastern Europe, Achilles Group