61. A safety regime for electrical and gas work needs to deliver safety while the work is being undertaken and safety of the completed work (i.e. product safety). Several submissions to the team argued that the overlapping legislation in the existing regime creates problems and that they wish to be covered solely by the HSE Act. The review team considers that the HSE Act is capable of delivering safety while work is being done. However, the HSE Act was not designed to provide comprehensive coverage of public safety. In public places and domestic situations once work is completed the site ceases to be a place of work. In these situations, proceedings under the HSE Act must be commenced within six months of the alleged offence, in accordance with the Summary Proceedings Act. This means that accountability for the continued safety of the completed work ceases after six months. As the risk to public safety is particularly high for completed work such as installations in domestic dwellings, either the HSE Act would need to be extended to provide better coverage of safety of the completed work or special purpose legislation (such as the Electricity, Gas and PG&D Acts) would continue to be needed to cover this kind of safety.

62. Neither the review team, nor OSH is in favour of extending the HSE Act to provide for all aspects of product safety, since the Act was specifically designed to cover safety in a place of work and changing it would dilute its effectiveness. Consequently, the need to comply with more than one piece of legislation will be unavoidable in many cases. The review team believes that an overlap is preferable to leaving gaps in the coverage of safety.

63. As two agencies and several pieces of legislation will still be required in the foreseeable future, it is important that the agencies involved in administering the regime develop clear procedures to ensure that there is a seamless interface between the different Acts, common processes, and consistent information and advice for the public and industry.

64. The boundary where HSE legislation stops and special purpose legislation starts and the level of regulation required in terms of particular types of work has been considered at length by the review team. A range of options has considered including:

Option 1: having the HSE Act cover all work except domestic installations and installations accessible to the public. For these, licensed workers would be required;
Option 2: as for Option 1 but with exemptions from using licensed workers possible for organisations with an approved safety system;
Option 3: licensed workers required for all gas and electrical work unless companies or employers gain exemptions through a formal exemption process. Exempted operations would be covered solely by the HSE Act;
Option 4: HSE Act covers all work in the workplace. Compliance with the HSE Act would require meeting pre-set criteria or using licensed workers. Outside the workplace licensed workers would be used.

65. Option 2 was seen as the best option as it was the most likely to deliver safety without imposing unreasonable compliance costs.

66. A significant factor in choosing an option broadly similar to the existing regime was the recognition that the existing regime has substantial sunk costs. It contains a licensing process that is widely understood and structures that operate to deliver safety effectively. Although groups and individuals consulted wanted improvements in processes, there was no strong case built for a radical change to the key elements of the basic structure of the regime.

67. It was noted that substantial effort and resources had gone into establishing the current regime and building a culture of compliance among industries over many years. Radical changes to key elements of the current regime would impose new costs and could undermine that culture.

Safety in the Place of Work

68. The review team considers that the HSE Act, which allows employers to develop their own means of compliance, should continue to provide for worker safety. The HSE Act should also be recognised as the primary piece of legislation governing safety while the work is being carried out, whether by electricity and gas workers, and for the safety of other workers using electricity and/or gas at work. The existing HSE regime appears to be working well in terms of providing for safety, especially for larger operations. OSH has experienced some difficulties monitoring compliance with the HSE Act for small operations providing services to domestic consumers, including appliance repair work. These difficulties are not due simply to a resource problem, but also stem from problems of notification and accessibility. In view of these practical difficulties, some additional mechanism is needed to ensure safety. The review team considers that this is best achieved by requiring the licensing of workers providing services to domestic consumers and small scale businesses.

69. The review team noted an anomaly in that Section 18 of the HSE Act be places duties on principals only in relation to their contractors (and any subcontractors and/or employees of contractors and subcontractors), but not in relation to the public who may be harmed by the work the contractor is engaged to do. This is inconsistent with the duty placed on employers to take all practicable steps to ensure that no action or inaction of any employee while at work harms any other person. The review team recommends that this anomaly be removed.

70. The HSE Act provides for Ministerial approval of Codes of Practice stating mandatory means of compliance with the HSE Act and Regulations. In addition, the requirement in the Act to take "all practicable steps" includes a requirement to consider the "current state of knowledge" about means to achieve a result required by the Act or Regulations. This enables industry-developed standards to also be recognised as means of compliance. However, such voluntary means of compliance may not always be followed and the review team considers that, because of the high level of risk involved in electrical and gas work, voluntary means of compliance should not be relied upon to deliver safety. The review team recommends that additional control over electrical and gas hazards while the work is being carried out be provided through regulations under the HSE Act where necessary. OSH's current policy is that regulations under the HSE Act may be made if there is a significant risk of non-compliance with voluntary controls or alternative control measures are not likely to be effective.

71. The review team recommends that regulations be developed to provide minimum requirements for the management of electrical and gas hazards, such as those being drafted under the HSE Act for petroleum pipelines. Regulations should also require periodic worker safety training for particularly high risk electrical and gas work. The current Electricity Act already requires periodic safety training as part of the licensing regime. It is recommended that these training requirements be modified as discussed in the worker competence section later in this report. Requirements for training would logically be placed in Regulations under the HSE Act as they focus on worker safety.

Safety of Completed Work

72. The review team considers that some form of Government intervention is necessary to ensure safety in relation to electrical and gas installations and the repair and maintenance of electrical and gas appliances for the following reasons:

Of all electrical and gas work, the public is most at risk from installations and appliances (primarily electrical), because of the high level of exposure members of the public have to these. Incompetent work on both installations and electrical appliances has led to serious injury and deaths.
Consumers, and domestic consumers in particular, generally lack the knowledge required to judge whether the worker is competent and whether the completed work is safe.
Worker competence is usually the most critical factor in ensuring safety.

Installation Work

73. The safety of installation work is determined to a large extent by the competence of the individual worker. Installation work is frequently carried out by a single worker, therefore, there are few opportunities to check whether the correct method of installation/repair has been followed. Often it is either very difficult or very costly to inspect the completed work, as wiring/piping may not be accessible to the inspector. Moreover, inspectors may not have the competence to inspect specialised or uncommon types of installations. Consequently, the review team considers that the most appropriate method of intervention will be one that focuses on the skills and knowledge of people carrying out installation work.

74. As a result of the high volume and variety of installation work coupled with problems of accessibility, after-the-event methods of checking competency (such as auditing to identify incompetent workers) are unlikely to deliver adequate levels of safety. Therefore, the review team recommends that the pre-market intervention of restricting entry via a licensing regime, which requires formal recognition of competencies, be employed to ensure the safety of installation work.

Extended Coverage of Work on Gas Installations connected to Small LPG Cylinders

75. There is a gap in the regulatory regime as the definition of work for which a registered gasfitter is required, excludes small LPG cylinders of the sort commonly used in caravans and mobile homes. There have been accidents and fires attributed to incorrect installation and poor maintenance of these installations.

76. The need for change in this area has been highlighted before and the industry was generally in favour of extending the safety regime, as is still the case. The solution to this problem is not as simple as merely extending the definition of "gasfitting" to require registered workers to do the work, as this would impose excessive compliance costs by catching appliances like barbecues and cabinet heaters. The definition may need to exclude certain appliances or be limited to fixed installations. Compliance costs could be reduced by allowing people who are suitably qualified to undertake particular tasks, rather than requiring that the work be done by fully licensed workers.

77. However these options do not address the secondary problem of installations becoming unsafe due to lack of maintenance. An option that has been discussed is the introduction of warrant of fitness requirements for gas installations in caravans. Another option is to provide consumers with safety information and new gas hoses when they bring their gas cylinders in for testing. The Dangerous Goods Regulations require that LPG cylinders must be tested every ten years and it is against the regulations for filling stations to fill untested cylinders.

78. After discussions with the Office of the Chief Gas Engineer and the Motor Caravan Association, the Motor Trade Association began offering voluntary safety checks for caravans and motorhomes by its alternative fuels technicians. This is a welcome step. However, the review team believes that more needs to be done in this area and recommends that further work be undertaken to identify cost-effective mechanisms of covering this gap in the safety regime.

Appliance Work

Safety of Appliance Manufacturing Work

79. The requirement to use licensed workers in the manufacture of electrical appliances became an impediment to competition between imported and locally manufactured equipment and was removed in the 1992 energy sector reforms. The safety responsibilities applying to importers, manufacturers and sellers provided for in Regulations, approved Codes of Practice, and recognised equipment safety standards have adequately covered equipment and appliance safety since then. Electrical Codes of Practice define the safety requirements for each appliance type and Regulations identify which appliances require approval by the Secretary of Commerce before sale. An independent review of this regime is being carried out in response to forthcoming Mutal Recognition Arrangements with other countries.

Safety of Appliance Repair and Maintenance Work

80. Currently, repair and maintenance work on electrical appliances must be carried out by licensed electrical service technicians. While there is no such general requirement for gas appliances, work on the control mechanism of an appliance falls within the definition of gasfitting and must be undertaken by a registered and licensed worker. Appliance repair work following an accident must be certified. Since a registered gasfitter cannot self-certify work, a craftsman gasfitter needs to undertake and/or certify the repair. The holder of a relevant exemption may be authorised to certify their own work or the work of others.

81. The review team recommends that the existing requirements for safety of appliances be retained in their present form until further work is done on the level of risk from repair and maintenance of appliances. In the case of electrical appliances, there is evidence that unskilled repairs have lead to serious injuries or death. This is not as significant an issue for gas appliances as people usually call in a licensed gasfitter to repair gas appliances rather than attempt to repair them themselves. However, poor maintenance of appliances has lead to some deaths. This is a particular issue for the maintenance of gas appliances on commercial premises.

Exemptions from Licensing

82. The review team acknowledges the requirement to employ licensed workers for all types of electrical and gas work on installations and appliance repairs/maintenance would impose unnecessary compliance costs on some sectors. Therefore, the review team recommends that exemptions from licensing be made available for particular situations, as discussed below. The key criterion for granting exemptions must be that safety will not be compromised.

General Exemptions

Appliance Manufacturers

83. There is an anomaly at present with manufacturers able to employ non-licensed workers to assemble appliances, but required to use licensed workers to repair them. The review team recommends that appliance manufacturers be exempt from the requirement to use licensed workers to repair the appliances that they manufacture.

Owner/Occupier

84. The review team recommends that the existing general exemptions enabling householders to undertake a restricted range of work, including the repair of domestic appliances, be retained. There have been very few safety concerns arising from householder exemptions since being introduced in 1993.

Work Under Supervision

85. The review team recommends that the existing general exemption enabling electrical and gas work to be done under supervision be retained, as there have been no apparent safety problems arising from this exemption.

Other General Exemptions

86. Other general exemptions exist, for example exemptions allowing registered engineers and tradespeople to undertake specified work. The rationale for these exemptions needs to be reconsidered and, if they are to be retained, there should be a consistent approach which applies to both electricity and gas. The safety implications of these other general exemptions also need to be reviewed to ensure that the exemptions are not leading to safety risks. For example, there is some anecdotal evidence that some tradespeople are not competent to do the range of work specified under the exemption.

87. There is a wide variety of occupations that include some "electrical work". These occupations range from aircraft and marine electricians, where most of their work is electrical in nature, to mechanical services (e.g. air conditioning) which involves limited electrical work. In the case of aircraft and marine electricians, the work they do is exempted from licensing requirements. However, mechanical services work is not exempted.

88. The review team recommends that for this range of workers, three options should be discussed further with the licensing boards and the groups involved:

The work could be specifically exempted from the licensing provisions and this may require specific procedures to be followed;
Other licensing systems recognising the competence of the person to carry out the work could be recognised. These might include qualifications with the relevant electrical competency units in them, for example. This option could be applied to gas, plumbing, and aircraft workers; or
Limited licences of the kind that currently apply to air conditioning installers could be used.

89. The existing exemptions from licensing are based on prescriptive criteria that include requirements to follow particular instructions contained within Codes of Practice or Standards. The review team recommends that the existing methods of providing these exemptions be retained and applied to the further exemptions recommended to ensure clarity, transparency and consistency.

Exemptions Requiring Approval

90. Currently there is a range of exemptions from licensing for electrical and gas work that require approval from the Secretary of Commerce. Both the Electricity and PG&D Acts offer an "employer licence". Employers must demonstrate that they have a system that is sufficient to ensure that employees are competent and that they receive the supervision and training needed to carry out the work safely. Employer licences may be granted for a period not exceeding five years.

91. Employer licences are available to employers able to demonstrate that they meet the criteria. This is intended to avoid the imposition of unnecessary compliance costs. (Licensed workers generally demand higher wage rates than unlicensed workers). Savings on training costs may also be possible, as training could be customised to the requirements of particular types of work, rather than requiring workers to gain the full range of skills required for an individual licence. If all training is carried out in-house, the ITO system of recognising prior learning/current competency will enable employees to have their skills formally recognised if necessary.

92. The number of employers with employer licences is small (35 for electricity and one for gas). Employer licence exemptions tend to be requested by large employers with sufficient resources to meet the costs involved in developing, implementing, and documenting an alternative safety management system, or those already operating a quality assurance system which includes safety management.

93. The review team recommends that the ability for employers to have an alternative to licensing through an employer exemption should remain. However, options for reducing the amount of administration involved for the Government, such as requiring employers to have their safety management systems recognised by an approved body (e.g. ISO 9000 accreditation), should be explored. Options for providing exemptions with lower compliance costs than that of the current employer licence exemption should also be explored.

94. The PG&D Act currently provides an exemption for work carried out at large industrial installations where the person(s) in charge of those installations is approved by the Secretary of Commerce. The review team considers that this exemption is in effect a mixture of exemptions already provided for (work under supervision and the employer licence) and the justification for retaining it should be considered as part of the review of exemptions.

95. The question of whether the employer licence process should be administered by OSH or some other part of the Government needs to be considered. At present it is administered by Commerce.

Limited Licences

96. Legislation provides for licensing boards to grant limited licenses to workers to apply to particular defined circumstances. This provides needed flexibility, but it is important to ensure fairness by deciding on approvals on a consistent basis and by making the conditions known.

Further Increasing the Flexibility of the Licensing Regime

97. The flexibility of the current licensing regime could be improved to ensure that areas of potential risk are brought under the regime and that unnecessary compliance costs are not imposed where the risk is low or has been addressed by an alternative to licensing.

98. As well as the coverage of gas installations connected to cylinders under 15kg, coverage of the repair and maintenance of gas appliances, particularly those used in domestic situations, needs to be examined more closely.

99. An area where there may be scope for a more light-handed approach to regulation is commercial installations and appliances, particularly those in a controlled workplace with no, or limited, public access. In these situations, the provisions of the HSE Act may be sufficient to ensure safety. Allowing workers to repair and maintain appliances for which they have gained relevant qualifications (for example a qualification offered by an appliance manufacturer) may be another suitable alternative to licensing in some cases.

100. The review team recommends that the extent of coverage of installation and appliance repair and maintenance work be further examined on the basis of a more detailed assessment of the risks involved in particular types of work.

Work in Electricity and Gas Supply

101. In 1993, work in the "supply" sector of the electricity industry, which encompasses work in relation to the generation, conversion, transformation, and conveyance of electricity (excluding work on installations), was brought under the current licensing regime. Previously the supply sector operated under a "registration" regime in a regulatory exemption system. Many of the electricity supply organisations operate under the existing employer licence exemption.

102. There are no licensing requirements for the supply sector of the gas industry (currently defined as work upstream of the meter). The coverage of the gas licensing regime was limited, for historical reasons, to work downstream of the meter. From a safety perspective, there does not appear to be any strong justification why the gas meter should remain the defining point for coverage. The review team considers that a safety regime for gas work should be designed to ensure safety in all aspects of gas work. Aligning the regulatory regimes covering electrical and gas work is also desirable, both for clarity and safety assurance purposes.

103. The supply sectors of both the electricity and gas industries have good safety records and are comprised of a small number of, generally mature, organisations. The majority of accidents that occur in this sector do not involve the public and relate to the safety of workers carrying out electrical and gas work. The number of persons and organisations carrying out electrical and gas work is increasing with industry fragmentation in response to deregulation. Electricity and gas supply is a specialist area that requires specialist knowledge, which means that an employer who is also the asset owner is likely to be in the best position to judge whether individual workers are sufficiently skilled to do their job competently. In the supply sector, design and operation of an entire system or process is often the most critical factor in ensuring product safety, rather than the competency of individual workers. Therefore, there appears to be little justification for individual worker licensing in the supply sector.

104. The supply sector, and the electricity supply sector in particular, has argued that supply work should be covered solely by the HSE Act. However, as discussed earlier, the existing HSE Act does not provide adequate assurance that public safety and the continued safety of completed work will be addressed. Additional legislation such as the Electricity, Gas, and PG&D Acts would need to provide this assurance.

105. The review team recommends that no formal approval be required to operate in the supply sector. The supply sector would be adequately regulated via performance-based provisions in the HSE Act. However, it is recommended that supply operations accessible to the public have a risk management system (what the gas sector refers to as a "safety case") that includes provisions for ensuring public safety. Additional Regulations and Standards for higher risk aspects of work may need to be developed and, where necessary, made mandatory, as has already been done for high-pressure gas pipelines.

106. The disadvantage of requiring a risk management system is that it is less suitable for smaller operations because of reduced certainty and the cost of developing the risk management system. However, it is expected that industry will move to develop model systems or safety cases for particular parts of the supply sector in order to reduce compliance costs to individual players.

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Printed: 25/11/2009