The Continuing Challenges of Balancing Process Safety Management and Personal Safety Management in the Oil and Gas Sector - The role of Corporate Governance and Leadership | By: Waddah S. Ghanem Al Hashmi
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The Continuing Challenges of Balancing Process Safety Management and Personal Safety Management in the Oil and Gas Sector - The role of Corporate Governance and Leadership | By: Waddah S. Ghanem Al Hashmi

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Global HSE Conference | Sept 26 - 27 2013 | New Delhi, India

Global HSE Conference | Sept 26 - 27 2013 | New Delhi, India

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The Continuing Challenges of Balancing Process Safety Management and Personal Safety Management in the Oil and Gas Sector - The role of Corporate Governance and Leadership | By: Waddah S. Ghanem Al Hashmi The Continuing Challenges of Balancing Process Safety Management and Personal Safety Management in the Oil and Gas Sector - The role of Corporate Governance and Leadership | By: Waddah S. Ghanem Al Hashmi Presentation Transcript

  • Technical Session 2A Topic : The role of corporate governance and leadership The Continuing Challenges of Balancing Process Safety Management and Personal Safety Management in the Oil and Gas Sector - The role of Corporate Governance and Leadership By: Waddah S. Ghanem Al Hashmi BEng(Hons), DipSM, DipEM, MSc, M BA, FEI, AFIChemE Director, EHSQ Compliance & Chief EHSQ Compliance Officer Emirates National Oil Company (ENOC), Dubai, UAE
  • Technical Session 2A Topic : The role of corporate governance and leadership Presentation Outline • Introduction and Background • Process Safety Management (PSM) • Methodology of this Study • Questions Asked • Formulation of Ideas – Results • Discussion of Findings
  • Technical Session 2A Topic : The role of corporate governance and leadership Major Incidents & Their Impact on Industry • Has changed Legislation – Regulations and the amount of self- regulation • Increased Awareness • Greater Transparency in Investigations • Better understanding of mode of failures • Greater need for more meaningful Risk Assessments • Impacts of disruption of supply chains • Greater need for EHS specialists – competent • Greater need for leadership development training View slide
  • Technical Session 2A Topic : The role of corporate governance and leadership Process Safety Management • High Risk Industries – need to become High Reliability industries • Greater engagement of the Board of Directors in EHS going beyond (a) KPI monitoring; (b) Incident Investigations; and (c) Approving funding for EHS related projects • Understand causality between practice and failure • Visible and sincere involvement rather than pronounced commitment • Director Training • Executive Management - Steering Group • Longer-term outlook for EHS – Sustainability • Doing this right and doing the right thing consistently View slide
  • Technical Session 2A Topic : The role of corporate governance and leadership Major Incidents & Their Impact on Industry • Has changed Legislation – Regulations and the amount of self- regulation • Increased Awareness • Greater Transparency in Investigations • Better understanding of mode of failures • Greater need for more meaningful Risk Assessments • Impacts of disruption of supply chains • Greater need for EHS specialists – competent • Greater need for leadership development training
  • Technical Session 2A Topic : The role of corporate governance and leadership Major Incidents - Examples– Oil Storage/Process Incident Location Year Fatalities/Injuries Loss Millions USD (Present-2011 values) Petrochemical Plant Explosion* Toulouse, France 2001 Yes 670 Refinery Fire & Explosion* Alberta, Canada 2011 Yes 600 Refinery Explosion* Mina Al Ahmadi, Kuwait 2000 Yes 590 Tank Storage Facility Explosion Hemel Hampstead, UK 2005 No 150+ Refinery Explosion* Texas City, USA 2005 Yes 200+ Terminal Explosion/Fire Jaipur , India 2009 Yes 2+ Terminal Explosion/Fire Milford Haven, UK 2011 Yes 3+ Source: *The 100 Largest Losses 1972-2011, March, 22nd Edition – Energy Practice + **Others
  • Technical Session 2A Topic : The role of corporate governance and leadership Industry Incidents – Marsh 2013 Report Between July – December 2012 alone • 6 Major Petrochemical Explosions and Fire • 6 Major and Serious incidents in E&P Offshore Incidents • 1 Very serious Onshore Incident • 2 serious incidents in Fertilizer Plants • 3 Major and Serious incidents in Gas Plants • 19 Refinery incidents ranging from significant to Major incidents • All over the world (in 6 months) Source: Loss Control Newsletter 2013 – Edition 1
  • Technical Session 2A Topic : The role of corporate governance and leadership Prevention of Major Incidents • Greater appreciation that major incidents can be preventable • Better and higher reliability engineering – safety in design, materials, engineering practices and technology • Better understanding of risk and more sophisticated quantitative risk assessments are available • More push from regulations/regulators to industry to submit independent RA/EIA/EBA • Lessons learnt from other incidents which have improvement systems, processes and hardware • More remote sensing systems/technology
  • Technical Session 2A Topic : The role of corporate governance and leadership Loss Prevention/Control Strategies • “Prevention better than Cure” • Driven by both legal requirements and also by stakeholder requirements • Appreciation that incidents are preventable • Duty of Care Principles • Human Impacts • Asset Impacts • Business Continuity Impacts • Cost Impacts • Image and Reputation Impacts
  • Technical Session 2A Topic : The role of corporate governance and leadership Loss Control Driven by • Quantitative Risk Assessments • Qualitative Risk Assessments • More sharing of industry reports • Better qualified specialist in the way of consultants and also the HSE and Risk Engineers • ERM has brought about appreciation of Risk Management at the Board level of organizations – Safety Leadership • Greater Stakeholder involvement (Banks, Insurance Companies, Special Interest Groups, Regulators) • Automation, Monitoring and Control • Business Continuity Planning Studies
  • Technical Session 2A Topic : The role of corporate governance and leadership Purpose/Objective of this Study This research addresses the PSM system and looks at the lacking human and behavioral dimensions. It aims to explore with 6 seasoned practitioners their views on PSM, leadership and governance and links with Behavioral Safety. “But whilst holding the handrails is good for driving some parts of the safety culture it won’t stop the stairs – or the rest if the plant – failing catastrophically if the condition of the hardware assets is not being properly monitored and managed”. Quote - Judith Hackitt’s (UK, HSE Chair) in a Marsh Energy Practice Report in 2011
  • Technical Session 2A Topic : The role of corporate governance and leadership Methodology of this Study • 5 questions relating to PSM and Human Factors/Behavioral Safety • 6 highly seasoned HSE Experts Respond • Simple Content Analysis Undertaken • Comparison between differing opinions and areas of agreement • Presentation of Findings • Discuss implications
  • Technical Session 2A Topic : The role of corporate governance and leadership Study Questions (1) What are the key differences between safety leadership and safety governance in high risk organizations? (2) What would you say in your mind where the top three attributes of High Reliability Organizations (HRO)? (3) Do you feel that process safety management and the systems developed around the elements of PSM are the best suited to prevent major catastrophic failures in plants and operations? (4) How would you say that you feel PSM and other EHS Management Systems have been able to deal with the human factor’s effecting good safety performance in your mind? (5) What are your views on the development of an Integrated Behavioral based PSM system – i.e. a IBBPSMS rather than a PSM or BBS?
  • Technical Session 2A Topic : The role of corporate governance and leadership Key Findings Governance and Leadership Key Ideas Cited: • Governance sets a long term destination whereas leadership sets the road map for the set coming period under direction of BoD • Safety Governance puts responsibility on CEO/Board – Doing the right thing and being accountable for it • Measurability & Integration – easier within an established framework • Human Factor Influence • Leadership have a unique opportunity to really influence performance at the framework setting model both at a framework setting level or more operational
  • Technical Session 2A Topic : The role of corporate governance and leadership Key Findings Governance and Leadership Leadership • Walking the talk – aligning behaviors consistent with the corporate vision • Changes behavior of followers by providing a compelling sense of direction to followers. • Involved in setting the strategic vision of the organization • Generally less granular than management who is responsible for achieving the tactical goals and annual plans of the organization. Governance • Sees the big picture and seeks to achieve value maximization as opposed to profit maximization. • Sets the strategic vision of the organization • Ensuring adequate resources are available for achieving the strategic goal of the organization. • Overlaps with the historical role of leadership. Senior leadership performs the oversight and governance required for the organization.
  • Technical Session 2A Topic : The role of corporate governance and leadership Key Findings - Attributes of High Reliability Organizations • Strong Safety Leadership and Governance • A shared vision – employees and contractors alike on safety • Supportive Organizational Culture • Just Culture • Problem Anticipation • Learning Organization/Learning from Incidents • Preparedness • Constancy of Purpose – Constant Message • Trust (Between Board/Management/Employees) • Commitment to High Standards • Management in Action • Passion for Continual Improvement • Competent Resources • Robust EHS and Asset Integrity System
  • Technical Session 2A Topic : The role of corporate governance and leadership Key Findings – PSM & Prevention of Major Loss • A balanced Management System which also looks closely at Asset Integrity is better suited to prevention of major losses • Whilst the PSM system is very powerful – it fails to prevent major losses due to the lacking human elements • Necessary but not fully sufficient – need greater knowledge of the systems and the human factors • Lacks dynamic risk assessment principles • Missing Elements (Critical to Safety Culture Development) – Competency Assurance; Employee Participation and Key Performance Indicators Measurements
  • Technical Session 2A Topic : The role of corporate governance and leadership Key Findings – PSM & Dealing with Human Factors • Generally poorly – many technologists, engineers and scientists are involved and much of the focus has been on interfacing • Behavioral safety and cultures is still the weakest link • Human factors needs work closely between hard scientists and soft social researchers • Much room from improvement – can argue that is why we have repeated incidents and not really learning from past incidents • Human behavior is important to consider when developing systems and procedures – sometimes that is not done effectively • Good success in improving performance in general with PSM/systems • Failed to drive Operational Discipline – Systems needs to be built on concepts of OE to inspire hearts and minds
  • Technical Session 2A Topic : The role of corporate governance and leadership Key Findings – Integrating BBS & PSM • Something that is really worth looking into. Mainly to deal with the growing complacency because of greater automation and technology. • Links back directly to strong governance and safety leadership – balancing between systems and culture development where safety behavior is very innate in the organization. • Significant as PSM has a greater capacity to deal with both personal and process safety – only it needs to strengthen the related elements. • Best solution for the industry in the future. • Integration of human beings with the system – focused on raising awareness all the time; normalizing safe behaviors; risk assessment is a part of every action of every person. – good example is the UK Olympics Legacy.
  • Technical Session 2A Topic : The role of corporate governance and leadership Key Findings – Overall Analysis • There is agreement between practitioners/experts on many of the issues with respect to governance and leadership – they express this differently • This warrants a common definition • The PSM system – even if implemented as per current standards is not sufficient in addressing prevention of major incidents • The lacking elements in PSM include employee participation; competency; BBS and human factors • An integrated system is agreed with whilst most steer towards fortifying the PSM system more with human factors considerations • Definite work is required between HSE scientists/engineers and behaviorists and behavioral scientists
  • Technical Session 2A Topic : The role of corporate governance and leadership Conclusions & Final Thoughts • Exploring the human interface side of PSM is important • We need to define clearly effective EHS Governance and EHS Leadership – where they differ and intersect – where they work together! • As this is different in different parts of the world – each organization needs to look at this with respect to their culture and workforce • With human factors we need more a “softer” human factors management sciences approach rather than just a human factors engineering approach • Further debate and discussion is required to establish the new elements that must be weaved in to the PSM system.
  • Technical Session 2A Topic : The role of corporate governance and leadership Thanks for you Attention ENOC would like to thank the Organizing Committee and Team of the Cairn Energy Global HSE Conference for their kind Invitation. Further information: write to GEHSSupport@enoc.com Floor open for Questions