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Cranes and Derricks in Construction

Proposed Rule

OSHA is proposing a rule to protect employees from the hazards associated with hoisting equipment when used to perform construction activities. Under this proposed rule, employers would first

RULE SUMMARY

OSHA is proposing a rule to protect employees from the hazards associated with hoisting equipment when used to perform construction activities. Under this proposed rule, employers would first determine whether the ground is sufficient to support the anticipated weight of hoisting equipment and associated loads. The employer then would be required to assess hazards within the work zone that would affect the safe operation of hoisting equipment, such as those of power lines and objects or personnel that would be within the work zone or swing radius of the hoisting equipment. Finally, the employer would be required to ensure that the equipment is in safe operating condition via required inspections and employees in the work zone are trained to recognize hazards associated with the use of the equipment and any related duties that they are assigned to perform.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness
1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
The proposed rule containing the RIA can be found on the website by using the general search function or a lookup under safety topics. It is also available on regulations.gov.
5/5
2. How verifiable are the data used in the analysis?
Most data seem reliable and verifiable. Sources are given for most data, but few links are provided.
3/5
3. How verifiable are the models and assumptions used in the analysis?
Many of the calculations are fairly straightforward and intuitive. However, the reader must take it on faith that "OSHA analysis" supports the projected reduction in fatalities and accidents. Some research is cited. A number of assumptions, especially used in the Cost-Benefit Analysis, don't seem to be based on any data. In some cases, the RIA references comments from industry, but it would be difficult for the reader to pin down where assumptions come from.
2/5
4. Was the analysis comprehensible to an informed layperson?
Calculations are extensive but not particularly complicated. While there's some jargon, it is generally pretty understandable.
4/5

Analysis
5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
3/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The desired outcome is workplace safety—reduced fatalities and accidents.
5/5
Does the analysis identify how these outcomes are to be measured?
Outcomes are measured in the number of fatalities and accidents avoided.
5/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The analysis asserts only that "OSHA analysis" shows that an indicated number of fatalities would be eliminated. The text of the rule does a better job explaining several published articles that identify major causes of crane accidents.
1/5
Does the analysis present credible empirical support for the theory?
Some examples of recent accidents are presented, and the preamble to the rule explains how the proposed rules would have prevented those accidents. It is not clear if these are typical or generalized examples.
2/5
Does the analysis adequately assess uncertainty about the outcomes?
Uncertainty is acknowledged, and several benefit estimates are offered. However, the sensitivity discussion is cursory and does not provide much in-depth analysis on how injuries and fatalities would likely be affected.
2/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
2/5
Does the analysis identify a market failure or other systemic problem?
The analysis identifies moral hazard and imperfect info on the part of employees (e.g. employers not paying for entire cost of injury, misjudgment of risk by employees).
4/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
Employers do not adequately protect against workplace injuries because employers do not bear the full costs; some are borne by employees, and some are borne by workers' comp insurance. Workers' comp insurance is not priced to reflect actual risk posed by individual companies going forward. Employees may not know the firm's risk.
4/5
Does the analysis present credible empirical support for the theory?
The analysis makes an argument for the theory, but little evidence is presented that demonstrates the theory is right.
1/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
The analysis does not address this topic.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
2/5
Does the analysis enumerate other alternatives to address the problem?
The analysis mentions and quickly dismisses other options. The agency appears open to several tweaks related to small business impact.
1/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
Some small tweaks are considered. Short-term alternatives that can be substituted until longer-term changes can be made are described. Market-oriented alternatives, such as compensating differentials in wages or insurance, are summarily dismissed during the discussion of market failure.
1/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
The analysis quickly dismisses the options as having no positive effect on the outcome. It acknowledges that some states have their own OSHA-approved safety plans, but does not consider whether any states already address these issues. The analysis claims national standards are necessary because the standards would inform crane operators in all states about safety procedures.
1/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
The analysis is careful to assess only the effects of the changes in regulation, but it does not consider trends in safety in the absence of the new regulation.
3/5
8. How well does the analysis assess costs and benefits?
2/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
The analysis includes extensive quantification of the costs of the regulation, but not of the rejected alternatives.
3/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
The analysis seems pretty comprehensive. Some costs seem to be omitted (e.g. daily visual inspections, because they are already a common industry practice). Furthermore, the RIA admits that there will be certain provisions that will not impose a major cost because of existing standards—this begs the question on why these standards are needed.
3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
The analysis considered elasticity of demand for crane services and largely concluded that demand is inelastic. Thus, the costs could be passed through to customers. The extent of this is not quantified.
2/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
See above—the effect is asserted but not quantified in the analysis.
1/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
Effects of several alternative assumptions about the effects of the regulation are briefly discussed.
1/5
Does the analysis identify the alternative that maximizes net benefits?
Net benefits are calculated only for the option chosen. The theoretical dismissal of other alternatives could be taken as a claim that they would produce no benefits.
1/5
Does the analysis identify the cost-effectiveness of each alternative considered?
See above.
1/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The analysis includes an extensive breakdown of costs by sector and various provisions of the regulation. There is no discussion of how costs would be passed on to various parties (including workers and customers).
3/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
Benefits are calculated for industry employees as a whole, not for particular sub-groups. There's only limited discussion about a safer work environment, but no explicit discussion about who receives the benefits.
1/5

Use
9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
A negotiated rulemaking produced the rule. The analysis appears to have been done after the committee finished writing the rule. The proposed rule makes a number of allusions to figures in the RIA, but it does not talk about how it influenced the actual decision making.
2/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Non-regulatory alternatives were considered and rejected as part of the market failure analysis—perhaps indicating OSHA believed they would produce no benefits. This analysis was wholly theoretical.
2/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
There is no explicit discussion of this; however, based on the RIA it is reasonable to assume that compliance with the standards and the number of fatalities and injuries could be used to track results in the future.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
OSHA could use fatality and injury data to track results predicted in the RIA, but did not commit to doing so.
2/5
Total 30 / 60

Additional details

Agency
Department of Labor
Regulatory Identification Number
1218-AC01
Agency Name
Department of Labor
Rule Publication Date
10/09/2008