Proximity sensors attached to the outer shell of robotic manipulators provide fast and occlusion-free perception capabilities of the robot's nearby environment. They offer a solution towards fenceless collaborative workspaces by closing the gap in perception between (3D depth) cameras and tactile/force sensing. The perception gap occurs at the robot's close range, where external cameras provide insufficient information due to noise, resolution, and occlusion, and where tactile sensors remain untriggered. The three main contributions of this dissertation discusses the development of a novel proximity sensor, and using the sensor system for reactive collision avoidance, and proactive impact attenuation.