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

Technical Session 2ATopic : 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 HashmiBEng(Hons), DipSM, DipEM, MSc, MBA, FEI, AFIChemE

Director, EHSQ Compliance & Chief EHSQ Compliance OfficerEmirates National Oil Company (ENOC), Dubai, UAE


Presentation Outline

•Introduction and Background•Process Safety Management (PSM)•Methodology of this Study•Questions Asked•Formulation of Ideas – Results•Discussion of Findings


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


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


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


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


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


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


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


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


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


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


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?


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


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.


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


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


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


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.


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


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.


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 [email protected]

Floor open for Questions

mailto:[email protected]

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

Business

role of corporate governance

technical session

serious incidents

refinery incidents

leadership purposeobjective

leadership loss control

supply chains greater

mode of failures greater