Third party verification services: Controversy elsewhere in province hasn’t hit Ottawa yet

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            Legal opinion and petition encourage contractors to use COR instead of commercial verification services

Ottawa Construction News staff writer

The Ontario General Contractors Association (OGCA) has launched a multi-pronged attack on third party verification services – an issue that has aroused significant anger in the Greater Toronto Area (GTA) and other parts of Ontario but not yet, it seems, the National Capital Region.

While Ottawa Construction Association (OCA) president John DeVries says “I personally (have) not received one call about it,  contractors, subtrades and suppliers elsewhere in the province have been complaining about the services which act as intermediaries in compliance verification.  “Maybe that reflects (the) issue being channeled to the OGCA or maybe (it’s) not happening here,” DeVries said.

The OGCA, on the other hand, has started a full-press-court lobbying campaign to thwart the third-party services’ expansion. These measures include starting a petition campaign, obtaining a legal opinion that the use of these services doesn’t meet the standards for due diligence and, most significantly, obtaining a decision by York Region to allow contractors to qualify for work with a COR (Certificate of Recognition) designation through the Infrastructure Health and Safety Association (IHSA), in place of the ISNetworld, one of the third-party services that has attracted the greatest level of controversy.

The third-party services charge fees both to owners and contractors and sub-contractors to gather and monitor compliance with various regulations, including health and safety and workers compensation rules.  However, several contractors have complained that the services create unnecessary bureaucratic burdens, increase costs (both in time and cash) and don’t truly confirm regulatory compliance.

The petition, addressed to the provincial labour minister and the Ontario legislature, says:

“We, as members for the Ontario Construction Industry, request that the Hon. Minister of Labour and the Ontario Legislature address the problem of Third Party Safety Verification. We collectively request that immediate action be taken to accredited employers who meet the standards for health and safety excellence via programs such as COR.

“There are numerous private unregulated companies that verify safety compliance, many do not verify that the programs are delivered. As a result, owners and contractors will be left with the mistaken belief that they meet or exceed their legal health and safety obligations; further, programs such as COR exist which verify that that the contractor is in full compliance.

“The Minister of Labour must act immediately to implement the Expert Advisory Panel recommendation #23 to: “Develop an accreditation system that recognizes employers who successfully implement a health and safety management system.”

The petition webpage at www.ogca.ca/petition, initiated on Nov. 6, includes a link to a Dec. 5 letter from Norm Keith, a lawyer with Fasken Martineau DuMoulin LP, commissioned by the OGCA to research the differences between the COR designation and the third party verification services such as ISNetworld.

“A system that requires solely the uploading of documentation to show that a company is safe is

unrealistic and may provide a false sense of security to an employer,” Keith wrote in the letter to OGCA president Clive Thurston. “Documentation is only one aspect of ensuring a defenses of due diligence. The system must be shown to be carried out in the workplace and known by all workers.”

Keith observed: “While documentation is an important aspect of due diligence in the event of a prosecution, it is important to exercise appropriate due diligence.

“This cannot be fulfilled by downloading documents into a database, auditing procedures only or stipulating specific definitions in a contract,” he wrote.

“With this in mind, it is conclusive that the requirements of COR, which include national standards, senior management involvement and a formal auditing protocol required annually, provide a superior assessment tool in confirming an OHS (Occupational Health and Safety) management system and due diligence. Consistent monitoring of the safety performance of an OHS management system, ensure that the system is based on continual improvement for the protection of workers.”

Keith says neither participation in third party services or COR are absolute guarantees of successful compliance or due diligence, and he cited two Alberta cases where construction businesses were fined, despite one using ISNetworld and the other participating in COR.

“Management review is an essential part of any OHS management system,” he wrote.       “Employers should keep in mind that approval by a third party as a contractor or the achievement of COR does not always guarantee a safety OHS management system. An employer should be aware that while both COR and third party may provide a means to show legislative compliance, having one system or the other does not negate the fact that companies may still be charged under the applicable statute or regulations.”

Nevertheless, Keith suggested that COR will likely provide a better vehicle to ensure senior management takes an active role in managing health and safety compliance.

“Another significant difference between COR and a third party is the requirement in COR that a representative from senior management and one designated full-time permanent employee must

take prescribed training offered by IHSA,” he wrote. “The training is conducted to help the employer

understand and commit to the program, and for the full-time employee to become the designated

internal auditor.”

However, he wrote: “There is no confirmation that a member of senior management is involved in the third party submission of documentation, or trained in the requirements of the company’s

health and safety management system.

“Statistics have shown that the greater involvement of senior management in a health and safety

management system, the greater the success in the protection of the health and safety of workers.

This is a key component that shows the involvement of management and practical efforts in the

practice of due diligence. In this way, COR provides owners with greater confidence that all

aspects of reasonable care are undertaken and meet all efforts recognized by the courts for a

defense of due diligence. On a balance of probabilities, in our opinion, the COR is superior to the third party assessment program.”

In a memo, Thurston emphasized the importance of field audits to verify whether there is genuine health and safety compliance.

The differences are important. COR requires actual physical audits of the firm’s policies and programs at their office and sites – TPSVC (Third Party Safety Verification Companies) does not,” he wrote.

“True accreditation programs require a great deal of work, investment and participation by senior management right down to the site collecting policies.  Firms invest in the necessary training and education of their workers through a program like COR.  We have learned that it is possible to meet the TPSVC requirements in 72 hours!

“Accrediting a firm that has achieved TPSVC compliance in just 72 hours does not constitute ‘Due Diligence’ nor is it of much value to an owner. We do not believe in having to register with numerous TPSVC, all with different practices.

“The OGCA strongly believes that these firms should not be relied on to accredit whether or not a firm is safe and is actually practicing safe policies.”

The controversy about third party verification services spilled into the open late last year when contractors and sub-trades began complaining that they were asked to provide unnecessary information unrelated to genuine health and safety compliance issues and pay hefty fees to access bidding opportunities, while they lost personal access and communication with the owners.  Contractors also complained about the verification services’ fees and continuous marketing of add-on services, adding to costs without increasing genuine business opportunities, and causing them to delete truly urgent communications requiring compliance documentation.

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