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2 July 2008 : Column 245WH—continued

The inquiry found a number of health and safety shortcomings. Workers on the platform were not adequately trained in emergency procedures and management were not trained to provide leadership during a crisis situation, as the hon. Member for Aberdeen, North mentioned. The approved maintenance paperwork system had been
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relaxed and there was a reliance on informal communication, which was not acceptable. Measures identified by previous risk assessment audits had not been implemented.

Lord Cullen’s 106 recommendations were all accepted by the industry, many of them being a direct result of industry evidence. Responsibilities for implementing the recommendations were spread across the regulator and the industry. The Government accepted the recommendations in full and committed themselves to reforming offshore health and safety legislation. By 1993, all 48 recommendations for which industry operators were directly responsible had been acted upon and substantially implemented. The Health and Safety Executive had also developed and implemented Lord Cullen’s key recommendation: the introduction of safety regulations requiring the operator or owner of every fixed and mobile installation in UK waters to submit a safety case to the HSE for acceptance.

Parliament has not been idle since that terrible night. It has ensured that the appropriate primary and secondary legislation has been introduced to back up the recommendations of the Cullen report. The Offshore Installations (Safety Case) Regulations came into force in 1992. By November 1993, a safety case for every installation had been submitted to the HSE, and by November 1995 all safety cases had been accepted. The regulations require the operator or owner, known as the duty holder, of every fixed and mobile installation operating in UK waters to submit a safety case to the HSE. The safety case must give full details of the arrangements for managing health and safety and controlling major accident hazards on the installation. Parliament quite properly revised the regulations in 2005, in light of 13 years’ experience. The objective of the revisions was to improve the effectiveness of the regulations while reducing the burden of three-yearly resubmissions.

In addition to the application of the Health and Safety at Work, etc. Act 1974, particular hazards in the offshore environment may need special consideration. Major sets of UK regulation therefore apply to the industry’s operations. The Offshore Installations (Safety Case) Regulations 1992 are underpinned by more detailed regulations. The Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995 set out requirements for the safe management of offshore installations, such as the appointment of offshore installation managers and the use of permit-to-work systems. The Offshore Installations (Prevention of Fire and Explosion, and Emergency Response) Regulations 1995 provide for the protection of offshore workers from fire and explosion and for securing effective emergency response. Lastly, the Offshore Installations and Wells (Design and Construction, etc.) Regulations 1996 are aimed at ensuring the integrity of installations, the safety of offshore and onshore wells, and the safety of the offshore workplace environment. That is what Parliament has done on the regulatory front since that terrible disaster.

It is important to look at the safety record in the offshore industry since the Piper Alpha disaster. The latest officially sanctioned and agreed fatal and major injury figures for offshore workers are for the year 2006-07. There were two fatalities during that period, compared with two in 2005-06, none in 2004-05 and
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three in 2003-04. Sadly, it is still a dangerous industry that takes workers’ lives, although, thankfully, in much smaller numbers than in 1988. Some 39 major injuries were reported during 2006-07, representing a fall of more than 20 per cent. from the 2005-06 figures. The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) made the interesting point that the industry is not declining: in 2006-07, there were an estimated 28,100 offshore workers, which represents an increase of 22 per cent. on the 2005-06 estimate of 23,000. His point was very well made indeed.

Malcolm Bruce: It is also worth putting on record that the industry has come up with a range of estimates of what is yet to be produced from the North sea, which could be nearly as much as the amount so far produced. It will certainly continue to produce for the next 30 years, contrary to widespread opinion that the North sea’s oil and gas-producing days are over. We are still 90 per cent. self-sufficient in oil and 70 per cent. in gas. People will have to continue to work there for many years on what is a mature infrastructure, so it is really important that safety standards are maintained.

Andrew Selous: The right hon. Gentleman is right to put on record that there is far more oil out there than we all thought 20 years or so ago. Furthermore, that oil is more difficult and technically challenging to bring to the surface than that extracted in earlier years.

In 2006-07, the rate of fatal and major injuries among offshore workers was 145.5 per 100,000 workers, compared with 225 in 2005-06, so there has been an improvement. Let us consider briefly the major types of accident. Slips, trips and falls, being trapped or struck by or striking against equipment, and injuries associated with lifts, pulleys and swinging loads account for 83 per cent. of injuries. We have preliminary and strictly provisional figures for 2007-08, which will be subject to a full and detailed analysis, and possibly revision. Given the importance of the issues, however, as much up-to-date data should be put on record as possible.

According to those provisional figures, the HSE does not think that there has been a deterioration this year. There were no RIDDOR—Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995—reportable fatal injuries in 2007-08, for which we can all be extremely thankful, and the number of major injuries sustained was similar to that in 2006-07, 39, which was the lowest recorded figure since 1995-96. The combined fatal and major injury rate for 2007-08 is expected to be similar to that for 2006-07, which was 145.5 injuries per 100,000 workers. It is certainly pleasing that the overall figures for fatalities and major injuries in the offshore industry do not appear to be following a worrying trend, although there are no grounds for complacency, as all Members have said. Current statistics indicate a combined total of 74 significant hydrocarbon releases, although we await further details from a few duty holders.

It is important, however, to look at the current state of the industry, and I have a number of questions, some of which have been posed already today, that I too would like to put to the Minister. I would be grateful for a general response, but if she cannot provide those
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answers, perhaps she could write to me and other Members present with the Department’s view. That would be entirely acceptable.

A few years ago, the general secretary of the Offshore Industry Liaison Committee—an independent union—said that

which is a worrying comment. However, we have heard from several Members this morning about the concerns that the pipelines and compressors are old and were perhaps intended to last for 20 or 25 years only. Is the Minister satisfied that the inspection regime, particularly for pipelines and compressors and other such vital infrastructure, is up to the job? What reassurances can she provide that she is confident in and satisfied with the inspection regime? Many of the pipelines and compressors were not expected to last for a further 10 or 15 years. We need reassurances on that very important point.

The hon. Member for Aberdeen, North suggested that we introduce independent safety inspectors. The Minister will know as well as I do that there is a long tradition of workers within the coal mining industry appointing, perhaps through trade unions, their own safety representatives. I do not know the view of the then National Coal Board when that was introduced, but it has proved incredibly successful in the coal industry and has given real confidence to the work force, because they are working alongside, and have nominated, those supervising, or having a major input into, their safety. There might be valid practical reasons why that would not work, or be applicable, in the offshore oil industry, but if so, I would like to hear that from the Minister. I would also be interested to know whether she thinks that that could be explored to ensure that the safety statistics that I outlined continue to follow a downward trend.

Finally, while researching this debate, I learned that the HSE had imposed a target to reduce by 2004 the number of offshore hydrocarbon releases to 50 per cent. of the 1999-2000 baseline figure, but I could not find out whether that target had been met. Perhaps the Minister, or one of her officials, has the answer, but if not, will she be kind enough to write to me?

10.27 am

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): It is a pleasure to respond to this debate and to serve under your chairmanship, Mr. Bercow—this is the first time that you and I have met in this arena.

I congratulate my hon. Friend the Member for Aberdeen, North (Mr. Doran) on his success in the ballot and on introducing this appropriate debate to mark the 20th anniversary of the Piper Alpha disaster. Those of us who sat through his speech will have found it a powerful and moving narrative of exactly what happened that day and in the aftermath. Certainly he brought back for me many of the images from that day, and many of us will have watched from the safety of our own homes and workplaces as those terrible events unfolded. Nowadays, we have 24-hour news coverage and direct access to information on all sorts of disasters, and we cannot overestimate how dreadful it was for the families not to
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know what was happening out on Piper Alpha. I also recognise his contribution to the promotion of health and safety standards in the North sea. He has campaigned inside and outside this House, and after listening to him this morning, we all appreciate why.

It is important that we remember with sympathy those who lost their lives in that terrible disaster, 20 years ago, the families of those people, and those who were injured in the disaster. As colleagues have said, it has had a lasting effect, and there is a dark memory and image of it across many communities in Scotland and beyond. I think that it was the hon. Member for Ribble Valley (Mr. Evans) who highlighted, in an intervention, what my hon. Friend was saying: the focal point was undoubtedly Aberdeen and the north-east, but the disaster touched communities all over the country. In my town, three men lost their lives.

The message from this morning’s debate is that we never want to see a repeat of that disaster. It was a wake-up call both for the offshore oil and gas industry and, as my hon. Friend pointed out, for the then Government. I know that he held many meetings with Ministers at that time. The cost of the disaster was very large in terms of the number of lives that were lost or shattered, and it cost £2 billion in damage and lost production. It also emphasised, in the starkest possible way, the importance of the oil industry to this country and the importance of having a strong safety regime offshore for the viability of a key sector of the UK economy. The industry employs 30,000 people and supports hundreds of thousands more jobs onshore. There are billions of pounds’ worth of offshore investment, and there is likely to be even more investment with the introduction of carbon capture and storage. All that is at risk if safety standards are not given the highest priority.

Many hon. Members have mentioned the Cullen inquiry. We agree that one result of the disaster was one of the most radical reforms ever made to a regulatory regime. Lord Cullen’s 1990 public inquiry report made 106 far-reaching recommendations, which have been mentioned, all of which have been implemented—some by the Government and some by the industry. There have been major achievements since then, such as the transfer of responsibility for regulating health and safety in the offshore oil and gas industry from the Department of Energy to the Health and Safety Executive in 1991—a move that was welcomed across the board. Another major achievement was the replacement of the earlier, prescriptive health and safety regime with a new goal-setting series of regulations that were made under the Health and Safety at Work etc Act 1974.

The cornerstone of the new regime is the Offshore Installations (Safety Case) Regulations 1992. As the hon. Member for South-West Bedfordshire (Andrew Selous) said, those regulations came into effect in 1993, and they have since been revised and modernised. They implemented Lord Cullen’s key recommendation that offshore duty holders should systematically identify major offshore hazards, assess the risks, set out the necessary controls in a safety case and submit it to the HSE. No installation can operate in UK waters unless the HSE formally accepts a safety case for it. It is not just about regulation: the industry’s whole approach to health and safety was galvanised after Cullen. The
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offshore industry spent more than £2 billion on health and safety improvements between 1988 and 1998, and has spent much more since.

Certainly, the aftermath of the Piper Alpha disaster saw a huge and necessary improvement in health and safety standards offshore. In the 20 years since then, there has been a significant reduction in health and safety risks and the industry has come a long way. I pay tribute to the work of the HSE in setting the regulatory framework and in leading the industry and other players towards having a better health and safety record offshore. However, as colleagues have pointed out, there are still issues affecting the industry’s health and safety performance that need to be addressed.

The North sea and other offshore areas remain hazardous places to work. I do not know if you have ever been offshore, Mr. Bercow, but even on a short visit, one has to go through the safety procedures and must understand that it is not a jaunt in a helicopter and that one is going out to a hazardous work regime. Like many hon. Members, I have done that. If one did not appreciate before that it is a difficult area in which to work, one realises it afterwards. Even visitors need to be alert to the health and safety issues and to their responsibilities as individuals, and the industry has to ensure that they not only get out there safely, but get back safely too. There are hazards from the hostile environment and from the possibility of helicopter crashes, ship collisions, structural collapse, explosions, fires and well blowouts. The potential for a major accident remains, and control of that risk demands constant and close attention from duty holders and the HSE, as the industry’s health and safety regulator.

The industry is dynamic and constantly changing. It is highly innovative, and develops cutting-edge technology to solve both old and new problems. Innovation is potentially good for health and safety, as well as exploration and production, because it provides opportunities to design out risks. The HSE is responsive to changing circumstances and is very happy to work with the industry to develop solutions that improve efficiency and raise safety standards. Health and safety should not be a costly afterthought; it should be an integral part of managing offshore operations.

The risk of a major offshore incident is ever present. Even given the huge strides forward on health and safety over the years, it is essential that vigilance is maintained and that the lessons of Piper Alpha are not forgotten. The incident at BP’s Texas City refinery is a recent example in the sector of the disastrous consequences that can occur when safety issues are not given the highest priority. We must all redouble our efforts to avoid a similar occurrence in UK waters.

I should like to recognise the industry’s efforts to improve health and safety through Oil and Gas UK, the Offshore Industry Advisory Committee and Step Change in Safety. In addition, the Government-led forum, PILOT, is concentrating on health and safety offshore, which I welcome. At last week’s PILOT meeting, I called on the industry to raise its game on health and safety still further. I called in particular on people at the top of the industry to show greater leadership to raise those standards. I am doing that because of some of the worrying messages that flowed from the HSE’s “Offshore Asset Integrity and Inspection Report”, which was published in November, on key programme 3. My hon. Friend
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touched on many of the issues that the report raised. As those elements are safety critical, any failure could result in a major incident.

The results are worrying because even after 20 years of giving high attention to health and safety issues, the report drew attention to a number of weaknesses. The report reached several conclusions, such as that the offshore industry’s poor performance and lack of progress in improving areas of asset integrity raises the concern that senior managers may not fully appreciate the implications that that could have on safety and business performance. It concluded that many senior managers do not make adequate use of integrity management data and do not give sufficient priority to ongoing maintenance. It said that the most senior management levels in companies need better key indicators of performance to inform decision making and to focus resources, and it found that many management monitoring systems tend to be overly biased towards occupational risk data at the expense of major hazard precursors.

The report also concluded that a key element in balancing priorities is ensuring that the engineering function has sufficient authority to put forward the case for major hazard control and to act as a backstop against degraded safety-critical elements and safety-related equipment and structure. It concluded that the influence of the engineering function has declined in many companies, and that there is poor communication not only between companies—my hon. Friend mentioned that—but between installations within companies. The industry is not effectively sharing good and best practice. It also found that cross-organisational learning processes and mechanisms to secure corporate memory need to be improved. Although there has been progress, such matters show that we still need a renewed and continuing emphasis on sustained improvements, not least given the number of people who work offshore and the likelihood that that may be expanded in the future, as the right hon. Member for Gordon (Malcolm Bruce) and others have highlighted.

As the offshore division of HSE conducts its regulatory oversight, it will use some key factors to hold the industry to account. Much of the offshore infrastructure is at, or has exceeded, its intended design life, which is an issue that has been identified this morning. Ageing offshore installations, changing ownership and management, worker inexperience, lack of corporate memory by managers, increased use of contractors and competition are among the growing challenges facing the industry.

Increased work force involvement in safety-critical issues is vital if the offshore industry is to improve its health and safety record. Incident statistics have plateaued over the past few years, and the UK is now reported to rank in the middle on an international basis, yet we have always aimed to be the best with regard to health and safety.

Taking account of those and other factors, I am pleased to advise my hon. Friend the Member for Aberdeen, North and other hon. Members that the Secretary of State has commissioned the HSE to review the industry’s progress on the issues identified by the KP3 programme. The issues include focusing on industry leadership to create a stronger safety culture in which the involvement of the work force, including the industry’s
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trade unions, will be critical. We expect the review to be completed by April 2009, and the report to be published soon after. That report will be put into the public domain.

Mr. Doran: I am grateful to the Minister for her statement. Will she confirm that the review will also consider the structure and the operation of the safety committees and the safety representative system?

Mrs. McGuire: That is why, in the last element, I particularly emphasised the involvement of workers and trade unions. In any of the conversations that I have had, both with the unions and with the industry, there was a strong recognition that workers, either through their organised trade unions or in other ways, must be totally involved in managing safety issues. After all, they have the most intimate knowledge of some of the issues that impact on this.

I am glad to tell the House that the industry, in partnership with HSE, has already agreed to focus on three priorities to address the key issues from KP3 and the safety concerns of the offshore division of HSE’s hazardous installations directorate. At the PILOT meeting, I impressed on the industry that Government attach great importance to progress on those fronts, and I am glad to report a shared understanding of the importance of that issue. The industry has agreed that its health and safety priorities are leadership, installation integrity and work force involvement. I want to say a few words on each of those fronts.

First, it is unquestionably the case that health and safety can be improved and standards maintained through strong leadership from the top of organisations. That was the theme of a recent HSE conference entitled, “Leading from the top—avoiding major accidents”. My second point covers installation or asset integrity. I have said that the offshore installations are ageing, and that comment has been reflected in much of what we have heard this morning. Much offshore equipment is now past its original intended life. If the offshore industry is to have a long-term sustainable and safe future and the benefits of offshore oil and gas are to be maximised for the nation, the assets must be properly maintained. There is now a widespread recognition within industry that that is a major issue.

Andrew Selous: Earlier, I asked the Minister to let us know whether she was satisfied with the current inspection of the infrastructure. If we have to wait until April 2009, we will have to hope that nothing goes wrong before then.

Mrs. McGuire: The hon. Gentleman is a little bit sour about that matter. It is not the case that we will wait until 2009. Constant work is being done by the offshore division of the HSE, the industry and the unions. As I hope I have reflected in my short contribution, that was a major item of discussion at last week’s PILOT forum in which the industry, Government and the unions came together to discuss the issues. Therefore, it is not a case of nothing being done until April 2009. I hope that he will recognise that this is a matter that the HSE takes very seriously, and has taken very seriously since it took over the regulatory obligations in 1991.

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