Contractor Health & Safety Forum - Offshore Project Safe€¦ · Overview of Woodside NWS Business Objectives . Eve Howell / Roy Thompson 15 . mins ... Helen Fitzroy 45 . mins

1Contractor Health & Safety Forum 5/8/08

Brownfield Projects

Contractor Health & Safety Forum

Paul Dean Project Engineering Manager/NRA Deputy Delivery Manager

August 05, 2008

Brownfield Projects


Brownfield Projects

CONTRACTOR HEALTH & SAFETY FORUM | PROJECTS DIVISION

Objective

‘Our Performance has flat lined… What do we do next?’

To come up with a Strategy on how we as a Group can make an impact on the next step in

Safety Performance.


Brownfield Projects

08.30 Arrival | Parmelia Hilton - Karri Room | Tea and Coffee

09.00 Introductions, Safety Briefing & Objective Sponsor : Ian Wilkinson 10 mins

09.10 Overview of Woodside NWS Business Objectives Eve Howell /Roy Thompson 15 mins

09.25 HSE Highlights, Lowlights, Trends & Lessons Learnt Aidan Hayes Henk Feyen 35 mins

10.00 Legal | Sparke Helmore Greg McCann 30 mins

10.30 Coffee Break | Morning Tea 15 mins

10.45 Case Study ‘Major Malfunction’ – Challenger Incident Facilitator: 30 mins

11.15 Table Exercise – Key Learnings from Case Study Paul Dean 30 mins

11.45 Table Feedback on Key Learnings 1 hour

12.45 LUNCH 45 mins

13.30 DVD | Gas Explosion 5 mins

13.35 Table Exercise –What do we need to do (collectively) to reduce Facilitator:our risk exposure and meet our HSE objectives? Paul Dean 25 mins

14.00 Rank and agree on way forward (Top 5 options) 30 mins

14.50 Coffee Break | Afternoon Tea 10 mins

15.00 Feedback Form Dale Gration 5 mins

15.05 Just a Number Helen Fitzroy 45 mins

15.50 AOB | Next Forum – Closure Dale Gration 10 mins

16.00 Drinks & Nibbles

CONTRACTOR HEALTH & SAFETY FORUM | PROJECTS DIVISION

AGENDA


Brownfield Projects

Ian Wilkinson

TW ISC Director and Forum Sponsor


Brownfield Projects


Brownfield Projects

Transfield Worley Services42 Months - Recordable Cases

(12 Month Rolling)

0.0

5.0

10.0

15.0

20.0

25.0

TRCF 12-month rolling 9.7 21.6 20.2 17.3 13.6 13.9 11.1 10.5 9.4 11.5 10.4 11.1 10.4 7.9 6.5 6.4 8.0 8.3 9.0 8.3 9.1 7.4 7.7 6.9 7.2 7.0 7.4 8.7 8.2 8.2 8.6 9.0 8.4 8.4 8.1 8.0 8.6 9.1 8.7 8.2 7.4 6.0

Jan-

05

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TRCF Jan 05 thru June 07


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Key Messages

Started between a small group and wanted to address what can we do better to improve the current situation. Overall worsening performance in the organisation. Cover some givens – we all want to improve safety performance. Secondly, we face similar circumstances; shortage of labour, lack of training and experience, tight schedules and a client common to all. Our safety performance affects each other. We must work to address this together.Thirdly from TW perspective, the fact is that within WA, we do not match the safety performance of our global peers. Not necessary to be competitive. Good safety performance is good for all. Protect our people, our client. Help each other to perform better.Ironic – sell together to improve safety performance. Issue around flat-lined safety performance have to do better by working together. Concrete actions to carry forward. Once session won’t improve but when walk away and action after this session.


Brownfield Projects

Eve Howell

Executive Vice President NWS


Brownfield Projects

Key messages

There is much talk about aspirations - “No incidents no injuries”. A perfect day is when we don’t hurt anybody. Currently there are 137 perfect days, so every other day we are hurting somebody. This is a long way from where we want to be. 19,000,000 man-hours were worked in 2007. 80%-95% contractor man-hours so contractors important to WEL. Have to be a high reliability team.

Going forward into a phase of many major projects. Major projects ahead are Pluto, Brownfield Projects, shutdowns, etc. In terms of WEL future there is a strong energy and gas focus. LNG Phase 5 to finish, NR2 gearing up, Pluto, a is a key project for WEL, the largest investment and critical to achieve from time and dollar prospective. As more facilities are built, there will be more Brownfield work and shutdowns. Huge period of activity, huge opportunity for all to work together as a team. Deliberations today will be worthwhile if it results in even one less injury, but confident will achieve a higher result injuries. Hope it will be the start of many forums to develop a good strategy, which once developed, will need to be reviewed on an ongoing basis until achievements are made.


Brownfield Projects

Roy Thompson

Senior Vice President Oil and Gas Projects


Brownfield Projects

Perfect days in Woodside have decreased from 71% in 2005 to 59% in 2008.TRCF at Woodside has increased from 3.8 in 2005 to 4.9 in 2008.OGP average TRCF is 2.3 for 2008 (projected).OGP Best Company TRCF is 0.5 for 2008 (projected).


Brownfield Projects

Whether at work (O&G) or home the three most common ways of being killed are:

Moving Vehicle incident;Fall from height; andDropped objects.

In 2007 out of 42 HPIs (potential fatalities) in Woodside 22 were from dropped objects.HPIF has decreased at Woodside from 2.4 in 2005 to 1.3 in 2008.


Brownfield Projects

Key Messages

Why are you here today? This year’s safety performance sub-standard. Current TRCF of 5 which is 40% higher than target, however, in April it was even 30% higher. At the latter part of the year we are actually improving. Somewhere in top 5 reasons for why this occurred, the following will be mentioned: “overheated market” and “inflow of inexperienced people” to accommodate the overheated market. This is identified as the problem but we have not responded to this. We have to get smarter to deal with this.

North West Shelf used an example where over 50% of workforce on a barge have less than 5 years experience. Australian is less experienced than Middle East or others because we do not have continuous experience. How do we correct it? We could review how we mobilise people when going offshore. An induction prior to boarding a construction barge induction only lasts for 2 hours. A possibility would be to balance the onshore and offshore inductions out by two days each. We need to start thinking about how to do things differently.

One of the main issues raised is that towards the end of a swing, people are the most susceptible to injury and more than 50% of incidents occur outside the “firing line”. It is easy to point fingers at supervisors, however, it is our fault as managers because there is not enough focus from us. Managers should communicate what needs to be focussed on. There is a lot of focus on bottom line and schedule but there should also be an increased focus on safety. The mega projects coming up are going to complex for instance Pluto has 7 000 employees at fabricating skids and it can be expected that Karratha will have 4 000 employees working on this, today is the time to start managing safety properly. Cannot carry on with the trend that we have today.


Brownfield Projects

Aidan Hayes

Vice President Health & Safety

Health and Safety Strategies and 5 Year Plan

WoodsideH&S Strategies

And 5 year Plan

WoodsideH&S Strategies

And 5 year Plan

Woodside Business Strategy and Plan

Woodside Business Strategy and Plan

Lega

l

Requir

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tsLe

gal

Requir

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H&S

Asp

iratio

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Com

mitm

ents

H&S

Asp

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Com

mitm

ents

Functional and

line capability

Functional and

line capability

H&S PerformanceH&S Performance

H&S Risks

H&S Risks

Sta

ff P

erce

ptio

nS

urve

y

Sta

ff P

erce

ptio

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urve

y

Less

ons

Learn

edLess

ons

Learn

ed

The 6 Health and Safety Strategic Imperatives

Improve Contractor Safetyperformance

Deeply embed Our Safety Culture

Avoid Major Accident Event

Understand and control Occupational Health Risks

Improve understanding of and compliance with our Processes, Standards, and Rules

Improve Lessons Learning from incidents and warning signs

Key Messages

The Challenge going forward is safety. Earlier this year the health and safety team reviewed what the influences need ongoing focus going forward. How do we get good safety performance to get good business going well? Safety is a leading indicator if a business is doing well.

What do we need to focus on?

Strategy – where is the company heading? Mega projects and the influence that they may have on us. At this stage fifty percent of workforce looking to retire in next ten years and there is fierce competition when it comes to new talent.

Other areas focused on were:

Legal requirements

Community expectations

Commitment to safety – being a leader in safety. Not performing to this.

Risk – Fatigue & stress and effect on production and safety.

Ownership of safety.

Performance – lessons learnt. Trends of re-occurring incidents. A survey was done on what staff and contractors say about WEL.

Health and safety function.

Key Messages

The Health and safety department decided to focus on five areas:

Contractor safety – committed to keep who work for, with and community safe. We should work as a single workforce and there should be no discernable differences on how people work onsite. WEL depends on contractors significantly as 80% of current workload is done by contractors. Five years from now it will change from 80% to 90% once major projects start. When WEL set targets should include contractor injury rates. The total recordable rate is included as the Safety key element of corporate scorecard and is weighted at 25%. Pretty unlikely that we will achieve 3.6 TRCF at end of the year. Everyone in the company has an influence how we look after our people. 92 people have been hurt to date of which 88 were contractors. WEL staff only has best ever performance in years but need to focus on where contractor safety is failing. We had not improved at contractor safety performance in the last 5 years. We have work together to improve on safety, therefore, we need to step in and change the safety culture because cannot continue with the current trend. Failure is not an option so need to look at what we are doing now and how it can be changed. Don’t need any more rules or tools have everything we need so recognise existing systems and work harder at adhering to it. We know what problems are so now we need to figure out how to proceed from here.

Safety culture – not where need to be. Need to avoid a major incident.

Occupational and health risks – stress and fatigue. Need to be better with compliance around safety and rules. Golden safety rules if working would eliminate 85% of incidents which have occured.

Lessons learning – no incident in future is a new incident, we repeating the same mistakes but failing to learn from it.


Brownfield Projects

Henk Feyen

HSER Manager Project Development


Brownfield Projects

Brief Agenda 2008

H&S Principals

H&S Performance

Support to improve Contractor Safety Performance


Brownfield Projects

Our Health and Safety Principles

Woodside is committed to achieving our goal of “No one gets hurt, No incidents”.Everyone in Woodside, employee or contractor has the right to go home from work in at least the same condition as when they came to workWe truly believe that all injuries and industry related diseases are preventable.Continuously improving our performance in Health and Safety and managing our risks is fundamental to achieving business successWe hold management accountable and everyone responsible for delivering health and safety performanceManagement will provide visible and active leadership in developing and maintaining a culture supportive of Health and Safety. Performance will be continually improved by setting and monitoring clear Health & Safety objectives, targets and plans.


Brownfield Projects

Sets the safety agenda across industry. Uses H&S performance as a tool for reliability and strategic advantage. High visibility and trust. External reputation

Manages safety strategically. Goes beyond compliance when it makes business sense to do so. Fairly proactive in industry.

Manages safety tactically, low profile, sees H&S as a cost, does not generally see H&S as a strategic asset.

Does the minimum to comply with laws and regulations. Uses a just-in-

time approach.

Avoids responsibilities.Regular non compliance with legislation

At RiskAt Risk

FollowerFollower

LeaderLeader

PathfinderPathfinder

ApatheticApathetic

Woodside’s ambition


Brownfield Projects

Functional Unit Performance – 1st Half 2008

TRAFFIC LIGHT LEGEND:GREEN = Meets or below Reduction Goal (when rounded to one decimal place)AMBER = Exceeds Reduction Goal by less than 10%RED = Exceeds Reduction Goal by more than 10%

as at 30 June 2008

Functional Unit Performance

Year To Date % Distribution of

Number Of

YTD Frequency

Rate

HPIF 2008 Reduction

Goal

Traffic Light Score

Number Of

YTD Frequency

Rate

TRCF 2008 15% Reduction Goal

Traffic Light Score

Project Development 11,910,356 74.73% 8 0.67 N/A N/A 62 5.21 N/A N/A

- Oil & Gas Projects 3,656,468 22.94% 3 0.82 0.79 29 7.93 2.75

- LNG Projects 6,319,767 39.65% 4 0.63 1.22 21 3.32 3.35

- Wells, Subsea & Services 1,363,813 8.56% 1 0.73 1.28 12 8.80 6.01

Production 2,046,026 12.84% 8 3.91 2.00 11 5.38 5.50

Exploration 609,561 3.82% 4 6.56 1.72 6 9.84 5.14

- Science & Technology 536,817 3.37% 4 7.45 1.89 6 11.18 3.41

Other / Corporate * 1,371,348 8.60% 0 0.00 0.00 2 1.46 1.15

- Supply Chain & Logistics 233,600 1.47% 0 0.00 N/A N/A 1 4.28 N/A N/A

Woodside Group of Companies TOTAL 15,937,291 100% 20 1.25 1.11 81 5.08 3.60

Hours Worked Safety Related High Potential Incidents Total Recordable Cases


Brownfield Projects

Safety Performance Highlights to 2Q 2008

TRCF for Woodside staff achieved lowest ever at 0.57 in JuneIn Feb & June, Production recorded 0 recordable injuries.Total number of recordable injuries at Karratha Gas Plant was the lowest for 9 months – only 3 to end of June despite a major shutdown in May.Phase 5 has achieved over 2 million work hours so far in 2008 without a Lost Time Injury – a big turnaround over 2007Pluto onshore module construction in Thailand achieved 3 million work hours without a recordable injury up until a minor Medical Treatment injury in late June.


Brownfield Projects

TRCF was significantly off track to meet our 2008 targets - 5.09, against target of 3.6 and 2007 performance of 4.1. HPIF was also off target - 1.26 against our target of 1.1 and 2007 performance of 1.3.Other lagging indicators also show deterioration in performance e.g. frequency of First Aid CasesincreasingWells & Subsea, Oil & Gas Projects and Science & Technology have underperformed against their 2008 performance improvement targets.A total of 20 out of the 81 recordable injuries to end of June involved Angel Project contractor employees.

Safety Performance Lowlights in 2Q 2008

4.365.09

0.99

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-07Sep

-07Oct-

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ecor

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YTD

Fre

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MTC's RWC's LWC's TRCF LWCF


Brownfield Projects

Contractor Safety Performance to 2Q 2008

Injuries to contractors account for 97% of all recordable injuries in 2008 (79 out of 81)Contractors account for 78% of exposure hours, some 12.4 million workhours out of a total of 15.9 million workhoursThe recordable injury rate for contractors has deteriorated since 2005, with no improvement on 2007 performance and in 2Q08

Woodside’s reliance on contractors will continue as the mega projectscome on line

Injury frequency risk may increase in parts of our business where we have lesser control and level of contractor oversight (MSC2 sites)

Woodside Exposure Hours by Staff & Contractor

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30.00

1998

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08

Expo

sure

Hou

rs (M

illio

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Staff Hrs Contractor Hrs

Recordable Injuries by Staff and Contractor

Exposure Hours by Staff and Contractor

Woodside Recordable Injuries and Frequencyby Staff & Contractor

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20

40

60

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140

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Staff TRC Contractor TRC Staff TRCF Contractor TRCF


Brownfield Projects

Woodside – 2008 YTD Injuries Summary

Number of People Seriously Injured:

Eye36

Hand/Fingers/Wrist112 Back

67

Knee42

Arms/Shoulder64

Head/Neck/Face62

Leg23

Foot/Ankle41

017

25

43

14

376

1774

Fatality

Lost Work Cases

Restricted Work Cases

Medical Treatment Cases

Occupational Illnesses

First Aid Cases

Total Incidents/HazardsReported in First Priority

Chest/Trunk15

62 Project Development: 29 Oil & Gas Projects; 21 LNG Projects; 12 Wells & Subsea

11 Production6 Exploration: 6 Science & Technology

2 Other/Corporate: 1 Supply Chain & Logistics, 1 Other/Corp USA

Exposure Hours: 15,937,291

Total Recordable Cases 2008 = 81

Other/Multiple8


Brownfield ProjectsActivities performed when injuries occurred

0

5

10

15

20

25

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35

40

45

50

Manual handling/lifting

General physical

Maintaining equipment

Operating deck & cargo

Operating equipment

Other

Administrative

Non-hazardous objects

Inspection/monitoring

2006 2007 1st Half 2008

Number of recordable Injuries per type of activity performed

In contrast to previous years where Manual Handingactivities resulted in the most number of injuries, most recordable injuries for 2008 have been sustained whilst performing general physical activities (moving about, walking etc)Of the 27 injuries sustained whilst performing general physical activities, 7 were caused by Hitting body against objects and 5 by falls on the same level


Brownfield Projects

Mechanism Causing Injury – For all TRC & Occupational Illnesses to Jun 2008

Mechanism Causing Injury by Severity - Jan to Jun 2008

0

2

4

6

8

10

12

14

16

[01]

Fal

ls fr

om a

hei

ght

[02]

Fal

ls o

n th

e sa

me

leve

l

[03]

Ste

ppin

g, k

neel

ing

or s

ittin

g on

obje

cts

[11]

Hitt

ing

stat

iona

ry o

bjec

ts

[12]

Hitt

ing

mov

ing

obje

cts

[13]

Rub

bing

and

cha

fing

[21]

Bei

ng h

it by

falli

ng o

bjec

ts

[22]

Bei

ng b

itten

by

an a

nim

al

[25]

Bei

ng tr

appe

d by

mov

ing

mac

hine

ryor

equ

ipm

ent

[26]

Bei

ng tr

appe

d be

twee

n st

atio

nary

and

mov

ing

obje

cts

[27]

Exp

osur

e to

mec

hani

cal v

ibra

tion

[28]

Bei

ng h

it by

mov

ing

obje

cts

[39]

Oth

er v

aria

tions

in p

ress

ure

[41]

Mus

cula

r stre

ss w

hile

lifti

ng,

carr

ying

, or p

uttin

g do

wn

obje

cts

[42]

Mus

cula

r stre

ss w

hile

han

dlin

gob

ject

s ot

her t

han

liftin

g, c

arry

ing

or[4

3] M

uscu

lar s

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with

no

obje

cts

bein

g ha

ndle

d[4

4] R

epet

itive

mov

emen

t, lo

w m

uscl

elo

adin

g

[51]

Con

tact

with

hot

obj

ects

[53]

Exp

osur

e to

env

ironm

enta

l hea

t

[59]

Exp

osur

e to

oth

er e

nviro

nmen

tal

fact

ors

[61]

Sin

gle

cont

act w

ith c

hem

ical

or

subs

tanc

e

[63]

Inse

ct a

nd s

pide

r bite

s an

d st

ings

[69]

Oth

er a

nd u

nspe

cifie

d co

ntac

t with

chem

ical

or s

ubst

ance

[71]

Con

tact

with

, or e

xpos

ure

to,

biol

ogic

al fa

ctor

s of

non

-hum

an o

rigin

[99]

Uns

peci

fied

mec

hani

sms

of in

cide

nt

RWC - Restricted Work CasePPD - Permanent Partial DisabilityOI - Occupational IllnessMTC - Medical Treatment CaseLWC - Lost Workday Case

Count of Mechanism Causing Injury Name

Mechanism Causing Injury Name

Injury Severity Point Name

Both PPD incidents were partial finger amputationsHitting body against objects or being hit by objects were the major causes of injuries


Brownfield Projects

Support to Improve Contractor Safety Performance

In the area of offshore Project Execution particularly with pipe-lay and dredging activities – the Project Management Teams have increased Woodside’s oversight on each project to provide active support.

This has also included WEL’s Health and Safety Function providing support to the projects.

Discussions by Woodside executives held with Contractors senior management team to improve safety performance.

Further work planned by the Projects Team to better understand where overall contractor safety management can be improved.


Brownfield Projects

For each works contract identify responsible person (contract sponsor) for providing assurance for safety matters on that contractEnsure that clear systems and processes are in place to report any instances of poor contractor safety performance or non-compliance with safety rulesProvide assurance that:

Woodside personnel visit facilities in accordance with agreed contract schedulesContractor training and/or competency requirements not metContractor reporting against current contract safety KPIs.

Line Management Actions to Improve Safety


Brownfield Projects

Playing Your Part – A Leader in Contractor Safety

Setting StandardsIn meeting with contractors – clarify our expectations. Share our concerns if health and safety appears compromised and not working effectively. Review contracts and safety KPIs - emphasise that schedule must never compromise safetyBe familiar with and endorse safety improvement plan Regularly follow up on performance and personally investigate causes and learning from individual incidents

Setting StandardsIn meeting with contractors – clarify our expectations. Share our concerns if health and safety appears compromised and not working effectively. Review contracts and safety KPIs - emphasise that schedule must never compromise safetyBe familiar with and endorse safety improvement plan Regularly follow up on performance and personally investigate causes and learning from individual incidents

Involving the WorkforceEnsure adequate safety support resources are available, and allocate sufficient time and priority for safety programmesActively encourage safety improvement programmes and support ideas to improve safety performanceTake personal action to improve contractor safety performance showing enthusiasm, decisiveness and supportSeek new and better ways to widen contractor workforce participation and involvement in safety

Involving the WorkforceEnsure adequate safety support resources are available, and allocate sufficient time and priority for safety programmesActively encourage safety improvement programmes and support ideas to improve safety performanceTake personal action to improve contractor safety performance showing enthusiasm, decisiveness and supportSeek new and better ways to widen contractor workforce participation and involvement in safety

Confronting Risk Lead or at least involve yourself in contractor incident investigations and ensure learning is applied to improve performance.Consider risks involved in upcoming contractor activities and ensure controls are in placeThrough safety conversations personally verify that safety hazards and risks are identified, understood, and are being well-managed in the workplaceIdentify possible risks to safety performance delivery in contracts. Watch out for improper motivators e.g. schedule Vs safety.

Confronting Risk Lead or at least involve yourself in contractor incident investigations and ensure learning is applied to improve performance.Consider risks involved in upcoming contractor activities and ensure controls are in placeThrough safety conversations personally verify that safety hazards and risks are identified, understood, and are being well-managed in the workplaceIdentify possible risks to safety performance delivery in contracts. Watch out for improper motivators e.g. schedule Vs safety.

Communicating ClearlyCommunicate regularly with Contractor management concerning performance against expectations -Visit Worksites regularly and lead safety toursListen generously to concerns and issues raised by the workforceAct quickly to address concernsEnsure contractor workforce knows about your concerns and expectations and let them know what you have done to address their concerns

Communicating ClearlyCommunicate regularly with Contractor management concerning performance against expectations -Visit Worksites regularly and lead safety toursListen generously to concerns and issues raised by the workforceAct quickly to address concernsEnsure contractor workforce knows about your concerns and expectations and let them know what you have done to address their concerns


Brownfield Projects

For Woodside getting safety right is not an option


Brownfield Projects

From…

To…

Individual agendas and multiple directions

Common agenda and single direction

Working together…


Brownfield Projects

Key Findings

Managers need to be more responsible. Please refer to the presentation. Options were listed that WEL can be at “Pathfinder”, “leader”, “follower”, “at risk”, “apathetic”. WEL is sitting between follower and leader. In some areas at higher risk. WEL is aspiring to become a leader in five years. Once established to move onto pathfinder.

Current situation: Oil and gas – red. LNG – turning in red. WEL Subsea and services – red. Not looking too good at the moment. Set target at 3.6 TRCF’s. Performance in first six months has been disastrous and we have not been able to sustain good performance. The short term turnaround of staff has lead to a high incident rate.

Look at activities moving ahead – will be looking at fair amount of people in congested area where we need to be able to look closely at activities and how to better health and safety performance. New type of work in KTA with rock moving and majority of work done by contractors and need to understand type of work to get better safety performance.

Seem to be focussed a lot on TRCF but should be looking at lead indicators. If lead indicators right ie. get preparation work ready and fully understand work then we will be able to improve safety.

Deteriorating rate on health and safety performance. January & February spate of incidents, again in April. Need to follow through and ensure that health and safety strategies in place.

Manual handling and manual lifting seem to be the areas that are highest risks. Need to look at better ways to follow through on Golden safety rules because if followed right it would have been dramatically reduced.

Do we fully understand JHA’s and work activities (two examples of partial amputee incidents were referred to).

WEL Health and Safety now providing more support. More managers getting involved with investigations to assist with getting more key learnings and rolling that out.

Focus to be given to communication. Understanding your needs to put together a better plan. One of the areas today where you as mature contractors are able to come to table with better ideas that WEL can look at.

“Getting safety right is not an option” is a good slogan to follow.

We should be working towards a common goal.


Brownfield Projects

Greg McCann

Sparke Helmore Lawyers

adelaide | brisbane | canberra | melbourne | newcastle | perth | sydney | upper hunter

Contractor Health & Safety Forum

Tuesday 5 August 2008

Legal Lessons

Presented by Greg McCann


•Safety Laws

•Incident at your Workplace

•How to Demonstrate Safety is Integrated in your Business

•Your Workplace and the Courtroom


Critical incident impacts

• Potential Impacts» Civil Claims – by the

family» Fatality – Coronial

investigation, findings, recommendations

» Workers’ Compensation

» Investor relations» Tender implications

» Commercial Reputation and Commercial Relationships

» Community reaction» Licences are jeopardised» Disciplinary action –

industrial issues» Criminal investigation

and / or prosecution

Tip: The impacts can be immediate and long lasting


The Petroleum (submerged Lands) Act 1967 Occupational Health and Safety

» Strict Liability

» Concurrent Liabilities

» Criminal Onus

» System of Work

» Cater for the careless, inadvertent, hasty or disobedient employee


Operators Obligations:•An operator must take all reasonably practicable steps to ensure that the facility is safe and without risk to “any person” and all work or other activities carried out on the facility is safe and without risk.

- Contractors, eg.

» Labour hire » Service suppliers» Electrician

•- Third parties, eg.

» Sales representatives» Family members, children, friends

Penalty – 1000 penalty unitsInspector Pompili v Central Sydney Area Health Service


Liability of Director, Servant or Agent•Where a body corporate is guilty of an offence, a director, manager or servant or agent will be guilty of that offence:

» Defence:› Took reasonable precautions and exercised due

diligence to avoid the conduct

» Maximum Penalty

› 1000 penalty units (=$110,000.00)

» Case Law

› Morrison v Perilya Broken Hill Ltd› Company Director


NOPSA Prosecution

» Coogee Resources» Between 2 May 2006 and 11 May 2006» Breach of Petroleum (Submerged Lands) Act

The registered operator of “Jabiru Venture” in TimorSea failed to take reasonably practicable steps to ensure facility was safe and without risk to health.


An operator who had only recently commenced workon the platform conducted work outside of the hand railed area, tripped and fell 4.7metres into sludge suffering serious injuries.

New JSA conducted identified the potential hazard of falling from heights and inadequate lighting.

› Maximum penalty $550,000.00› Penalty imposed $180,000.00

NOPSA Prosecution (cont)


•How do you demonstrate safety

•is a totally integrated

•component of your business


Serious Incident Management Procedure» Initial response» Legal Professional Privilege» Your Investigation» Media» Safety alerts » NOPSA Investigation» Documents (6 months imprisonment)» Due Diligence


•Your Workplace and the Courtroom


Conclusion

» YOUR SAFETY MANAGEMENT SYSTEM IS YOUR BEST DEFENCE

» Bulletins for changes to Safety and Environment Legislation and

» Recent Court Decisions.


Thank you

www.sparke.com.au


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Coffee Break


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Challenger Disaster

Presented by Paul Dean


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Challenger Disaster

Not an accidentLarry Mulloy – NASA Manager

HeartbreakMy Fault

Presidential enquiryKnown low temperaturesConcerns by Staff and contractorsOutside our experience base

Alan Macdonald – ThikolSent a note not to launch below 53ºF - actual was 29ºF

Flaws long known about sealing of rocket motorsPrevious mission delayed several timesThis mission delayed several times

Mounting pressure from the mediaTeacher on board, giving a lesson from space…on the weekend to empty classroom if delayed!

Previous flight at low temperature, problems with booster rocketsMorton Thikol (Rocket Contractor – Boosters)

First launch SRB was flexing, O Rings were working beyond designDefined as acceptable risks by NASA


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Challenger Disaster

25ºF was below experience baseNever been triedThikol presentation needed

Recommended not to launch by Thikol1985 letter written about O’Ring erosion – internal, not shown to NASA

Thikol prepared a no flight presentationLate presentationNASA and contractor working after-hours

Implications for Thikol managersContract with regards to NASA was up for renewal

Meeting at NASA, Florida – telecom between NASA and ThikolRecommendation not to launch (Thikol Engineers)Erosion of O’Ring due to cold (temperature and loss of seal will be catastrophicToo dangerous to launch No simulation done for these conditions

NASA says conclusion “does not hang up”What evidence do you have?Has been accepted in all previous flights (blow by)


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Challenger Disaster

Vice President of Thikol“Not to launch”

Engineer has to rely on data – NASA says “no data, on the contrary performs better at low temperatures”??NASA manager

Is it logical?George Harding – (Senior Engineer at NASA)

Shocked by Thikol’s presentationAlthough won’t agree to launch against contractors recommendation

Preparations for launch continuedThikol management now questioning risk

Engineer cannot prove it will fail but expects low temperature will make it worsePhoto’s show low temperature is a problem?Thikol Management says data not conclusive

−

“Guess its alright to launch”Engineer – “I was powerless”Thikol– recommends launch as conditions will not be different than previous launches

ResultCold froze the O’Rings coupled with severe cross winds caused seal failuresNot an accident!! It was foreseen

“Just happed to be involved in an accident” NASA Chief


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Case Study – Table Exercises


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Case Study – ‘Major Malfunction’

Team/Table ExerciseReview the video and consider

Major contributing factorsInfluencing aspects, people, situationsInternal / External pressuresCould we have a similar incident happen in our business

Discuss the Incident and determine key findingsDiscuss and agree Root CausesDetermine key learnings

Table Feedback – Nominate a SpokespersonWhat did we learn from the incident?What would we do to prevent a similar occurrence?


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Table exerciseMajor Contributing factors* "Prove it" culture* Commercial / Contractual - reputation and major contract to loose* Communication problems. Lack of transparency* Element of complacency. Basing judgement on last 25 successful launches. Wilful

disregard on new information.* Insufficient management support for engineering decision* Key stakeholders dismissal/ not contacted* Lack of manufacturing data - engineers did not have relevant data* Lack throughout process of any type of third party verification.* Lessons learned not implemented (kept in-house)* Management influence - peer pressure

Non-democratic decision process* Media pressure* Misalignment of expectations* NASA contractor "What is acceptable risk?"* NASA safety culture - pushing responsibility down to contractor. Contractor to accept the

risk.* No previous exposure to low temperature* No recognition of human risk. Driven by dollars, schedule reputation.


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Key findingsMajor Contributing factors* Political pressure

* Poor basis of design

* Poor management of change process

* Schedule: deadline / critical path pressure

* Two parties client and subcontractors. Two interested parties. Should have been independent party.

* Political pressure: Internal / External NASA

* NASA accepted a less than adequate design.

* Lack of acceptance by NASA

* How do you define an acceptable risk?

* Better communication and alignment with contractors

* Technical assurance in parallel with management role

* Renegotiating contract

* Alignment of stakeholders

* Risk process poor

* Lack of experience

* Operating envelope


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Key findingsCould you have a similar incident happen in your business?* Clear lines of communication between all parties* Bullying not accepted.* All stop! Try to empower everyone to call an "all stop". The two engineers who tried to call

an "all stop" were questioned by manager. Would our people feel sufficiently empowered to call an "all stop"?

* To be conscious of scheduling and timing.* Design acceptance criteria to be stringent.

* Safety First - assurance checks. Independent verification.* Robust management of change process.* Improve safety culture across the board.* Understanding and implementing of lessons learnt.* Identify risks and takes steps to mitigate* Technical integrity and management* Alignment with contractor safety* Data and testing should have been done.* Management pressure and culture.* Understanding conditions.* Lack of acceptance by NASA* Unreasonable pressure on contractor.


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Lunch Break


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DVD Gas Explosion


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Table Exercise

What do we need to do to reduce our risk exposure and meet our HSE objectives?


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Table Exercise – Meeting our HSE objectives

Objective‘Our Performance has Flat Lined…….What do we do next?’

What do WE need to do to deliver a step change?

Consider what we have covered today:Safety culture, management focus, denial, operational pressures The implications of maintaining our current performanceOur current Safety trends – increasing risk, increasing incidents?Our business objectivesThe current business environmentThe Challenger and Veranus incidents


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In your teams:Consider what are the key problems, issues & barriersWhat would be the “ideal scenario”, ie. no constraintsGiven the ideal scenario how will we get there? What options do we have?Appoint spokesperson and present findings.

Then…Collectively rank our optionsEach table to spend 5 minutes deciding on the top 5 optionsSpokesperson to mark up master options sheet (one tick for each item)

Zelda to collate the “Top 5 Options list”


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How will we get there

National framework for supervisor training Develop rapid lessons learnt process Lesson learnt from peer groups or wider industryConsistent Golden Safety rules.More regular engagement between contractors Attitude – Assessments, training, monitoring and supporting. Some form of blacklist.Common training scheme / Competency. Log book.Substantial inductions.Same safety tool.Commitment / alignment – all CEO’sEngage unions and government.Share pool of critical resources. (example crane drivers)Rotate safety champion.Draw up on execution plan. Mentoring.Employee career plan. Defined R&DContract management more hands on.


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Reinforce HSE messages by making it personalRun inductions by people with work / site experiencePre-mob planning - More time for inductionsTry and increase number of experienced supervisor. Increase ratio of supervisors to inexperienced people. Procedures must be robust.Greater numbers of HSE advisors / coaches on site.More resources required for lessons learned and feedback on that.Well motivated teamContractor / client interface (must listen)Implement learningsAligned behavioural safety training (Woodside)Common process riskRealistic schedules with HSE floatSimple, common leading and lagging indicators across all work groupsCommon PTW across oil and gas


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Improved leadership and supervisor educationSenior supervisors at plantAchievable and sustainable safety goalsHigh standard mature safety management cultureAlign all contractors with Golden safety rules and safety trainingStructured ASA’s compliance with Golden Safety RulesOnly use qualified contractorsOngoing HSE Forum


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External assignmentFrom the “Top 5 Options” each company to:

Work up your own strategies to address the Top 5.Feedback at the next forum.

−

Did it work for you?

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What was your experience?

Next forum – where to from here?


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Feedback form

Dale Gration


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Helen Fitzroy – Just a Number


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AOB - Closing

Dale Gration


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Closing

James Reason: “Safety management systems are brought

to life an appropriate organisational culture”.

Edgar Schein:

Culture – ‘it’s the way things are done around here” →Aidan Hayes / Henk Feyen – improve the culture.

Leaders create and change cultures, managers and

administrators live within them.

Woodside wants to be a leader – Henk Feyen.


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Closing

How do leaders do this?

Leaders create cultures by what they systematically pay attention to:

Greg McCann – what have you done for safety and can you demonstrate what you have done!

It’s what they:

Notice and comment on;

Measure and report on;

Control – Risk management / Change management

Reward / Recognise; and

In other ways what they systematically deal with (workplace and courtroom)

“The conversations” –

Greg McCann

“What have you done

previously?”


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Closing

The point Schein makes is that organisational

cultures may be detrimental to safety not because

leaders have chosen to sacrifice safety to chase

production but because they have not focussed their

attention on safety – Criminal conviction.


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Please join us for Drinks and Nibblies at the Globe Restaurant