Thursday, February 17, 2011

The Case for a Chief Safety Officer


The furore caused by the SC judgment on the Bhopal catastrophe has initiated a lot of debate on both the prevention of such incidents and the fixing of liability when such events do take place. The debate on the civil nuclear liability bill, the inferno at a fuel depot in Jaipur and the gulf oil spill have made this topic very relevant today. While the primary motive of any industrial concern is the generation of wealth through the production of goods and services, it should go about this process in such a manner that the health, safety and well being of its employees, customers, the general public and the environment is preserved. The consequences of industrial disasters – ranging from loss of human lives, to environmental damage and the resultant financial and legal liabilities on the corporates should make the government and corporates sit up and take notice. As the old adage goes, an ounce of prevention is worth a pound of cure. A top imperative for any company should be to institutionalize the safety processes across all is operations.
A very apt model for institutionalizing safety processes in each and every action of a company is the way a Finance department is run within a company. Cutting across the silos, the Finance department ensures the propriety of cash flow into and out of the company. The books of accounts are subjected to statutory audit on a quarterly basis and the buck stops at the desk of the Chief Financial Officer (CFO). Additionally, every public company has to publish its quarterly financial statement that is counter-signed as authentic by the CFO and the Managing Director (MD). No transaction – be it a few rupees worth or a few millions worth – is outside the purview of the internal and external audit teams. To top it all, the audit committee of the board of directors oversees the internal audit and external audit process and monitors the internal control process. A key function of this committee is to ensure regulatory compliance. All companies put in place multiple layers of monitoring and control for the finance function as this is at the core of the raison d’etre of the company, namely, making profits.
The above model is worth emulating in building a safety organization within a company. Many companies do have a safety department, but this is typically relegated to a subsidiary function that often exemplifies “responsibility without authority”. Analogous to the Finance department, the safety department should be authorized to oversee the gamut of processes – from the design and layout of the building as per safety norms, the processes used for production, the compliance of the end product to safety regulations, the consumption of natural resources to the safe disposal of wastes. The safety department should be headed by a Chief Safety Officer (CSO) who has a seat on the board of directors and reports to the MD. A key role of the CSO is to institutionalize periodic safety drills, benchmark the response times in these drills and bridge the lacunae identified. The CSO should lay down the safety policy of the company and should conduct a quarterly audit to ensure compliance to the guidelines. The audit should oversee the adherence to norms, scope for human errors, equipment wear and tear and all other factors that could affect safety. The audit reports should be filed with the regulatory authorities after approval of the board. The CSO should recommend enhancements to the safety apparatus as and when needed. At the board level, a safety committee can oversee the audit and ensure compliance to regulations. In due course, an Institute of Safety Auditors can be constituted akin to the Institute of Chartered Accountants for the external audit.
A logical question is whether the office of the CSO is established to find a scapegoat in the event of an industrial accident. Going back to our analogy, a CFO is never fired or sued for every audit objection or financial fraud or loss that occurs in a company. But, the CFO is held responsible when the financial loss can be traced to a deliberate systemic flaw. Similarly, a CSO need not be hounded for minor incidents due to human error or negligence. But, the CSO should be held liable if the accident can be attributed to a deliberate and systemic subversion of safety processes. The European Union guidelines used for fixing liability when a life saving equipment fails is a valid reference model. If the company can produce pre-existing documentation to prove that all commercially reasonable care had been taken to identify the weak links and mitigate the risks by design then it is free from criminal liability even when an equipment fails. Experience shows that major catastrophes take place when the minor symptoms are ignored and glossed over. Putting in place a formal safety organization with responsibility and authority is the only option companies have to prevent accidents and fix liability in the event of an accident.
Following the Bhopal verdict, a reputed banker lamented that punishing non-Executive directors and Chairmen for industrial accidents would scare away professionals from becoming independent directors. The solution is fairly simple – professionals should choose only those companies that have institutionalized and internalized safety.

Thursday, October 29, 2009

Getting a Khatha for a BDA site.... (aka Mission almost Impossible)

If you thought going on a goose chase on the outskirts of Bangalore looking for BDA sites and coughing up exorbitant sums of money was all that you needed to do be a proud owner of a BDA site, here is a Do-It-Yourself guide on how to go about. The process starts with a legal verification by a competent advocate. You need to collect a whole bunch of documents (xerox copies) from the seller. This includes:

  1. Allotment letter from BDA to original allottee
  2. Original sale deed from BDA to original allottee
  3. Sale deeds for each of the subsequent transactions
  4. Original Encumbrence certificate for the duration from allotment of site to present date (see process below)
  5. Latest Tax receipt
  6. Khatha certificate of present owner

Getting the Encumbrence certificate is a streamlined process, the only hassle being identifying the Sub-Registrar office under whose jurisdiction the site falls and then making a visit to this office. The best time to go there is around 9 AM. Don't fall off your chair, these offices do open that early. Except that instead of employees, you fill find touts occupying the seats meant for employees. You need to give the site details (Site No., Layout, Block) and pay the tout Rs 100- Rs 200 and specify the duration of the certificate. You can return in 3 hours and the certificate will be ready. Sincere touts even give you their mobile numbers, so that you can cross-check before going. Bookmark this process, you will need to do this once again.

If you are going through a real estate broker, negotiate with him upfront on the brokerage to be paid. Typically, it is 1% of the total transaction amount. Upfront negotiation can save a lot of trouble later.

Once the advocate gives an absolute clearance that the deal is legally feasible, you can initiate the initial agreement on a stamp paper. The advocate can help you draft an agreement. Value of stamp paper depends on the total transaction amount. This process involves an advance payment with a commitment to close the deal finally on a specified date, say a month later. This draft agreement mentions the "real" value of the site. The final sale deed that is registered will be for a lower amount called the guidance value. So the normal practice is to destroy the draft agreement once the final agreement is registered.

The interim period can be used to secure a loan if applicable. It is highly advisable to engage a lawyer to draft the final sale agreement and engage him to represent you at the Sub-Registrar's office at the time of registration. The Sub-Registrar's office functions as a well-oiled machinery, the "oil" being currency notes. Advocates typically charge Rs 10-12K as fees, which includes the charges for the "oil". Taking the lawyer along smoothens the process and you will be amazed at the speed with which the system works if you use the "correct" approach. Be sure to take xerox copies of all the above mentioned documents, demand drafts (one to the seller for the guidance value and the other to the Sub-Registrar as Registration fee). Find out from the lawyer the exact value of the demand draft and whom it should be payable to. In addition, carry a few photographs, PAN card, Passport, Address proof (just-in-case). Once the registration is done you can collect the original sale deed from the Sub-Registrar. Do remember to collect the original documents of the site (all mentioned above) from the seller.

More later.......................................

Friday, March 6, 2009

Gurur Brahma.....

A sleepless, early summer night triggered a few fond thoughts. "The greatest teacher is one who makes you want to learn", so says a plank placed near the Principal's office in TKM College of Engineering. Who are those great teachers that made me want to learn? My earliest recollection is of Ms Catherine who tutored me at home from 2nd standard to 4th standard. Before that, I honestly do not think that I brought studies home. Thanks a ton to her for creating an urge in me to read, study, come first in the class and even made me try my hand at public speaking. That I ended up with my foot in the mouth during elocution was my fault.
Zoom to the tenth standard and there was Mr. I. T. Chacko, who taught Mathematics. I haven't had a better teacher of maths ever before and ever since. He had this uncanny knack of making the lessons equally interesting to the best students and to those had a phobia for maths.
Pre-Degree education in Kerala in late eighties was a race from one Tuition centre to another with cursory attendance at the College to barely meet the mandated requirements. The two shining stars of private tuition in Alleppey were Gopi Sir for Chemistry and Kallelil Sir for Physics. The two were poles apart in style but right on target in substance. Gopi Sir has a finely groomed personality; well dressed and smart looks; always punctual. He comes fully prepared and gives a well scripted performance. Kallelil Sir was the exact opposite: looking sleepy, unkempt hair, preferred extempore performances to prepared lessons. While both the tuitions served the basic purpose of scoring good marks, they also served to create a huge interest in the subjects.
In the next four years in the Engineering College, I had the good fortune of being a student of many a great teacher: some admired for their teaching skills, some for their love to students and some for both. Gopakumar sir (aka Gopettan), Ms Geetha Abraham (aka Geethu) were well known for their affectionate nature; while George Varghese Sir (GV), Roshan Kumar Sir etc were respected for their knowledge and sincerety. But the super-teachers were Dr Ziaudeen and Dr Vijayan Asari who really knew their jobs and also took good care of us. Ziaudeen Sir taught us Electronic Circuits, some of the classes are unforgettable even today. (I am lying here partly, the experience was unforgettable, but I cannot remember the role of the emitter bypass capacitor in the Common Emitter amplifier. :-) ) . Vijayan sir taught us Computer Organization, Microprocessor and DSP and guided the projects of almost every student in class. It was our good fortune that both these teachers were fresh from their PhD courses when they started teaching us. They could take on any work load for they believed that they were not paid for teaching 1 hr a day and smoking/drinking tea for the rest of the day.
Are there such good teachers out there for the next generation?

Monday, December 1, 2008

Thoughts on Mumbai terror attack

Yet another attack and the same old reactions from the politicians, police and intelligence officers. A slew of measures are announced, deliberately with no firm timelines, so that these can be flagged as work-in-progress forever. The banal excuses of lack of consensus, centre-state equations etc will come in handy for not implementing these measures. Assuming optimistically that these measures are implemented, are these sufficient? I am afraid, no. As a society we have been for long engaged in doublespeak - criticizing violence when it does not suit us and ignoring or even justifying violence at other times. In this country, even for crimes of enormous gravity, there will be one or the other powerful section that supports and justifies the crime. UPA, BSP etc wants to go soft if the suspects/convicts are Muslims, Sangh Parivar wants to go soft if the suspects/convicts are Hindus, DMK wants to go soft if the suspects/convicts are Tamils and so on. Every party will put in its best efforts to scuttle probes or derail the trial if their cadres are involved in crime. Add to this, the efforts of the rich to get away with any crime by paying off everyone from police to witnesses to victims. The end result is that even the assasination of a former PM or serial bomb blasts or massacre of hundreds of people or attack on the country's parliament do not appear serious enough to ensure that the perpertrators are promptly punished. We have action/reaction theories, tree-falls-earth-quakes theories, postulated by our leaders to justify the worst forms of violence. The endless cycle of violence and retribution in the subc0ntinent gives little hope that Mumbai-like attacks will not recur again.

The government boosting security measures and adding NSG battalions is only part of the story. An equal part needs to be played by citizens in securing our own lives. This would involve sticking to rules, putting up with queues, tolerating frisking etc. As a nation, we prefer freedom to discipline, even if that means a threat to our lives. It is a common sight to see people sneaking below closed level crossing gates trying to save a few minutes and in some occasions getting crushed under speeding trains. Ditto for people prefering to attempt daredevil crossings on roads to save the trouble of walking on a foot overbridge. The irony is that despite all these, we do not give a damn about punctuality in our day to day lives. Politicians, sundry officials, their third cousins, grand nephews etc would begin a scramble to exempt themselves from checking, finally making a mockery of the security measures.
Historically, violence and terror as instruments of control and power are probably as old as the human race. Human history is punctuated by epic battles, involving brothers, different races, nations, compatriots, castes, religions and on two occasions, the entire world. Extrapolating this trend does not give much hope of peace and tranquility.