Regulation and the role of trust: Reflections from the mining industry

Abstract

The role of prosecution in achieving compliance with social regulation is a highly contentious issue, nowhere more so than with regard to work-related injury and death in the New South Wales mining industry. Following a mining disaster, political pressure prompted the mines inspectorate to abandon its traditional 'advise and persuade' approach in favour of a much tougher, deterrence-oriented approach. Our field-work suggests that while the former approach can result in regulatory capture, the latter can be equally counterproductive. In the mining industry, interactions between inspectors and the regulated industry are frequent and ongoing and trust is central to constructive relations. When those relations break down (as under an inappropriate prosecution policy) then dialogue ceases, information is withheld rather than shared, in-firm accident investigation, prevention, and remedial action are inhibited and both sides retreat to a form of adversarialism that undermines regulatory effectiveness. Through a 20-year case study of the mines inspectorate, the article demonstrates the centrality of trust to regulatory effectiveness, how it can be lost, and how it can best be regained.