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Contractors and Outsourcing

There is tighter control and requirements for an organisation to ensure that its outsourced processes are defined and controlled. When outsourced products and/or services supplied are under the control of the organization, supplier and contractor risk must be managed effectively. Organisations cannot contract out the risk.

Outsourcing (supply chains) are becoming increasingly complex, without the right balance and awareness, management potentially have substantial risks to the business consisting of legal, financial and reputational risk. Businesses must now look beyond their own immediate health and safety issues and take into account the wider society. By thinking about its contractors and suppliers, the organisation will be able to consider the effect on their neighbours (or other interested parties).

Contractors also fall within the scope of ‘workers’; contractors should be fully engaged by organisations to enable development, planning, implementation, performance evaluation and actions for improvement of the OH&S system.

Contractor / Outsourced activities can include a multitude of services provided / undertaken on behalf of organisations, such as:

• Maintenance
• Construction
• Facilities
• Security
• Cleaning
• Waste management, etc.

As noted, organisations cannot contract out risk, when contracting with external organisations they need to ensure that hazards and associated risks are identified and controlled by both parties. Organisations must define OH&S criteria for the selection of contractors. Some factors to consider include:

• The ability of the contractor (external organisation) to meet requirements
• Competency to determine hazards, assess risks and determine controls
• Effect the outsourced process on the organisation

Once engaged with outsourced providers, the organisation should also consider and specify how the provider will co-ordinate with the organisation, including relevant controls already determined, incident / near miss reporting and interaction with other workers.

Controls are an important part of the outsourced process. Controls should be defined within the organisations systems and communicated with providers. Controls can include, contractual agreements, training, inspections and risk assessments.