Investigating the economic effects of long-term investment in HSE , Oil company in Iran

Even with the rising number of diseases and their severity as well as occupational-environmental accidents occurring within organizations, most managers do not still care about the profitability of implementing the health, safety, and environment (HSE) management system requirements.

Accordingly, the integration of the HSE costs calculated through engineering-economics relations was investigated to evaluate the given profitability using a different approach. For this purpose, costs of diseases and occupational-environmental accidents were computed (n=2207), and then lack of their spending was considered as system income. By determining the correlation and calculating the P-value as well as the associated costs, the regression model was subsequently fitted. Investment in the HSE management system was further examined, and return on investment (ROI) and net present value (NPV) were calculated. Afterwards, the relationship between ROI and disease recurrence rates together with occupational-environmental accidents was explored.

health costs with a P-value=0.03 had a significant effect on disease recurrence rates, so that the incidence rate was equal to 1.432 e-15 as it increased by one unit. The costs of accidents with a P-value=0.048 also had a substantial impact on the occurrence of occupational accidents and a growth by one unit, wherein the accident recurrence rates were 9.183 e. However, no significant association was found between environmental accidents and disease incidence rates.

The results implied that investment in HSE management systems is not just in accordance with implementing profitability requirements, but it should be targeted and based on priorities, influenced by the results of examining root causes of diseases and accidents as well as assessing risks facing organizations.