Malcolm Broomhead, chairman of explosives company Orica, explained at the company’s annual general meeting that several executives would receive bonus cuts in light of two work fatalities during the 2017 financial year.
The first employee died at a customer site in Peru in February 2017 and the second in an explosion at a production facility in Sweden in May 2017.
Chief executive officer Alberto Calderon and safety, environment and security group executive Richard Hoggard will take a 20 per cent cut to their bonuses, group executive for Latin America Sebastian Pinto and chief commercial officer Angus Melbourne 15 per cent cuts, and all other executives 10 per cent cuts. Broomhead said the cuts reinforced Orica’s “absolute commitment” to safety.
“These adjustments to business performance outcomes directly affect the level of short-term incentive each executive received,” he explained, “and reflect the applicable level of management control by the executives over the causal factors of the fatalities.”
CEO and managing director Alberto Calderon admitted the fatalities were “unacceptable and preventable”, and that the entire management team would prioritise its focus on safety.
“Following both incidents this year, we undertook comprehensive investigations to understand the root causes,” said Calderon. “It was found that a significant contributing factor to each of these fatalities was that processes that were put in place to protect us from injury were not being followed.
“Obviously, this is never acceptable, and we are making it clear through every level of the organisation that this will not be tolerated.”
The company has since implemented a major hazards initiative to better identify any hazards that could lead to serious harm.