Select Committee on Work and Pensions Written Evidence


Memorandum submitted by the Offshore Industry Liaision Committee (OILC)

1.  SUMMARY

  1.1  Our comments and the supporting evidence are confined to the regulation of the UK Offshore oil and gas production industry. Our comments are therefore confined to the work of the Offshore Division (OSD) of the HSE and the offshore policy division of HSC. We believe that, to date, both bodies have been unable to effect any significant improvements in reducing risks to the health and safety of offshore workers. Specifically we would point to:

  1.1.1  There has been little or no improvement in major accident/fatality and incident rates over the last 12 years.

  1.1.2  The regulatory and enforcement strategy adopted for the offshore industry tends to overemphasise major hazards at the expense of effective control of the day to day hazards faced by the workforce.

  1.1.3  OSD often appears reluctant to take formal enforcement action, namely the issuing of Improvement or Prohibition Notices, to address regulatory breaches. We would argue that, on occasion, their enforcement practice is not consistent with the HSC's stated policy of proportionate enforcement, as reflected in HSE's Enforcement Management Model (EMM)

  1.1.4  OSD appear unable or unwilling to engage the offshore workforce in promoting a safe working environment. We believe the statutory requirements for workforce consultation could be properly implemented as a means of improving this. For many offshore workers OSD appears more concerned with maintaining a close working relationship with industry management.

  1.1.5  OSD/HSC often appear a "captive regulator". This perception is borne out of the belief the safety agenda and policy is being set by the industry. The workforce and their Trade Union representatives have had little influence on the agenda.

  1.1.6  There is a lack of "joined up government" in the overall approach to the promotion of health and safety. Here the entire industry operates under licenses granted by the Crown, yet the individual safety performance of operating companies does not appear to be a factor in selecting licensees. Indeed when OSD/HSE recently reported that it had evidence that many companies were not properly maintaining their installations, the report failed to provide the details of those offenders.

  1.2  Despite these criticisms we believe that OSD/HSC could be an effective regulator if it were to adopt a policy of fair, impartial enforcement of existing offshore health and safety regulations, coupled with greater transparency in reporting.

2.  RECOMMENDATIONS

  2.1  We recommend that:

  2.1.1  Enforcement by OSD/HSE should be in accordance with the principles of the HSE "Enforcement Management Model" (EMM). Transparency of this process could be ensured, for example, by requiring Inspectors to write to Installation Safety Representatives on all occasions where a regulatory breach has not resulted in the issue of an enforcement Notice, explaining the justification.

  2.1.2  General consultation with the industry on all technical and enforcement issues should be under the auspices of the existing tri-partite Oil Industry Advisory Committee (OIAC) and should involve workforce representatives.

  2.1.3  The existing legislation on Safety Representatives roles and functions on offshore installations should be revised. This revision should be conducted under the auspices of OIAC.

3.  THE OFFSHORE INDUSTRY LIAISON COMMITTEE (OILC)

  3.1  The Offshore Industry Liaison Committee (OILC) is an independent Trade Union. It is not affiliated to the TUC.

  3.2  Like all trade unions OILC is established to promote the interests of its members. This includes the advocacy of better pay and working conditions, stable long-term employment and the health, safety and welfare of its members.

  3.3  OILC is unlike other trades unions in a number of ways.

  3.3.1  We are a single industry union. We draw our membership only from the upstream Exploration & Production (E&P) sector of the oil and gas industry and we are largely dedicated to employment within the UK offshore based sector of the industry. Most of the membership work offshore on the UKCS as at least part of their employment. Many are full time offshore employees. Members can be found in a wide range of roles from experienced professionals to new recruits in semi-skilled trades.

  3.3.2  Although OILC is not recognised by any employer, its membership comprises about 10% of the offshore workforce (3,000 out of 27,000). Given that the union is not recognised by any employer, it can be assumed the members are activists concerned with bettering employment conditions rather than the semi-inert who sometimes join "recognised" unions.

  3.3.3  Although OILC has only two full time staff, we can mobilise the knowledge and experience of our members to analyse issues and assist the union. We can and do make substantial contributions to the debate on offshore health and safety and other employment issues and regularly punch above our weight.

  3.3.4  We are non-political. We sponsor no MPs. We tend not agitate on general broad social issues. We will, however, take an active part in single issue campaigns that affect our members. An obvious example is our participation in ongoing debate on corporate responsibility.

  3.4  Promotion of the health and safety of our members and others in the workforce is an important part of our activities and the one for which the union is perhaps best known. It is not, however, our only or even our overriding interest. We also support our individual members on a wide range of employment issues and, more generally, advocate improvements in all Industrial Relations matters that affect our members. Many, but not all, of these IR concerns have important health and safety dimensions. We may share common safety goals with industry and regulator but these must be put into the context of the overall interests of our members. That said we will never accept the `elf 'n safety' excuse for poor management, or mistreatment of our members.

4.  EXPECTATIONS OF OSD/HSE

  4.1  We expect HSC/HSE to discharge the duties given to them by Parliament in Section 1 of the Health and Safety at Work etc. Act namely:

    "securing the health, safety and welfare of persons at work"

  nothing more, nothing less.

  4.2  We expect HSC/HSE to use the powers given to it under the Act and all the resources granted to them by the Government to secure that aim for the offshore industry. We accept that it may be appropriate for HSE to give priority to the aim of the HSE mission statement in the Strategy to 2010:

    "To protect peoples health and safety by ensuring that risks in the changing workforce are properly controlled"

  even if this is at the expense of some aspects of welfare to the offshore workforce.

  4.3  For all of the reasons set out in the "summary" of this submission, we believe that HSC/HSE has thus far failed to effectively discharge its duties to the UK offshore E & P industry and moreover its workforce. The inability to engage with the workforce; being perceived as a captured regulator; an apparent reluctance to use enforcement powers; and the lack of transparency in reporting and reluctance to be held to account to all stakeholders, all detract further from the ability of the HSE/HSC to achieve its stated goals. We base these criticisms on hard evidence, most of which can be found in HSE publications, including published injury and incident statistics, the `HSE Offshore Health and Safety Strategy to 2010' (HSE Offshore Strategy) and "Key Programme 3—Asset Integrity Programme" (KP3).

5.  LACK OF IMPROVEMENTS IN SAFETY STANDARDS

  5.1  HSE assumed responsibility for offshore safety from the then Department of Energy on 1 April 1991. The first years of HSE stewardship were spent in recruiting and organising an enlarged inspectorate and in establishing a new legislative framework. By 1996 the current system was fully in place.

  5.2  HSE does not control all the hazards to the offshore workforce. It has no authority over aviation matters although helicopter accidents are the biggest single cause of fatalities to the offshore workforce. In the period 1989 to 2005 a total of 28 workers were killed in helicopter accidents out of a total of 71 reported deaths in offshore work in the UK.

  5.3  While lead indicators are of use, our view is that the only justification for H&S regulation is a demonstrated reduction in injury and ill-health. The best measure of the effectiveness of OSD/HSC as a safety regulator is the change in reported offshore injuries and dangerous incidents. This approach is used by OSD/HSC who frequently use trends in injury rates to argue for the effectiveness of their stewardship of offshore safety. On this basis OSD/HSC have had little effect on offshore safety.

  5.4  OILC has published an analysis of HSE's own published offshore injury and incident statistics.[58] This shows little or no improvement in the bellwether combined rate of fatal and major injuries. For example, in 1995-96 offshore workers suffered 47 fatal or major injuries and in 2006-07 the same workforce suffered 41 fatal or major injuries. This apparent small improvement is in part due to the reduction in the exposure of the offshore workforce and the equivalent injury rates per million hours worked actually increased from 0.70 in 1995-96 to 0.72 in 2006-07.

  5.5  This apparent static position over 12 years masks an initial large deterioration in fatal and major injury rates from 1995-96 to 1998-99 and the subsequent slow recovery to 1996 levels.

  5.6  In fairness, OSD/HSC have had some success in reducing the numbers of less serious injuries, albeit the reporting of these injury types are historically difficult to substantiate. However, and assuming there has been improvement, this does not compensate for the failure to even maintain the rate of fatal and major injuries at 1996 levels throughout the last 12 years. By our analysis, had HSE maintained all injury rates at 1996 levels, the costs of injury to the industry would have been lower by several million pounds. This is an admittedly trivial sum in the context of the budget for OSD/HSC but does suggest the HSE have not made effective use of the substantial extra funding made available to it from 1991.

  5.7  Further evidence of this apparent inability to bring about improvements in safety performance can be found in the recent OSD/HSE report on the physical condition of offshore platforms.[59] In late 2007, OSD/HSE reported the results of 83 visits to offshore installations made from 2004 to 2007. These visits were made for the purpose of assessing the physical condition of the plant and the quality of the maintenance management systems. The report found serious short comings in the condition of safety critical plant on many installations, which vindicates the complaints of poor maintenance of offshore plant and industry short-termism made by OILC and other critics of the industry since the late 1990's. Again it is clear that OSD/HSE has not been able to establish that essential work has been done to ensure the control of risks.

6.  EMPHASIS ON MAJOR ACCIDENT HAZARDS

  6.1  The transfer of responsibility for offshore safety in 1991 arose from recommendations made by Lord Cullen following the Piper Alpha disaster in 1988. As part of the new offshore safety legislation, OSD/HSE introduced the Offshore Installation (Safety Case) Regulations. These came into effect in 1995 and placed emphasis on the control of so-called Major Accident Hazards (MAH). These were catastrophic events such as fire and explosions and structural collapse with the potential to cause multiple casualties. Oil companies and drilling contractors were required to prepare `Safety Cases' setting out how they would ensure compliance with health and safety regulations. In addition the Safety Case set out the arrangements for controlling MAH. Unsurprisingly a great deal of time and effort was spent by both the industry and OSD/HSE in evaluating and inspecting control measures for these MAH often at the expense of the control of less "glamorous" hazards. In essence the main effort was placed on avoiding large multi-injury but rare accidents, at the expense of the control of everyday common workplace hazards.

  6.2  While Safety Cases must be accepted by OSD/HSE if an offshore installation is to operate, the Safety Case regime does nothing to ensure adequate control of risks. The Safety Case regime has been little more than an ineffective series of paper exercises. In fact, new or revised Safety Cases are accepted even if the dutyholder has a history of failing to comply with the arrangements to control risks, arrangements which invariably were included in previous Safety Case submissions.

  6.3  The concentration on major accident hazards does not reflect the real risks to the offshore workforce. Of the 13 offshore fatalities from April 2000 to date (discounting the 18 helicopter and 15 shipping deaths) only two were associated with major accident hazards. The offshore workforce are being killed and maimed by falls, dropped objects, crushing and the like but not by massive explosions or structural failures. The fundamental causes of these injury types are not effectively addressed in the safety case exercises.

  6.4  The implementation of the Safety Case regime places too much emphasis on the paper assessment of management systems without a corresponding effort to ensure that they are properly implemented in the field. Policies and procedures coupled with poorly researched lead indicators do not prevent accidents, only detailed, time consuming inspection does. OSD/HSC seems to lack the ability or will, or more likely the resources, to ensure that the arrangements to control risks as set out in the Safety Case are implemented.

  6.5  We suggest that OSD/HSE effort would be better devoted to frequent detailed unannounced inspection of operations in the field, coupled with proportionate enforcement action.

7.  FORMAL ENFORCEMENT ACTION

  7.1  HSE Inspectors are appointed to bring into effect the Health and Safety at Work Act and its relevant statutory provisions. They do this by a process of enforcement. This enforcement includes giving formal and informal advice, serving formal Notices requiring that breaches of regulation are remedied and ultimately prosecution. The HSC has set out a policy of effective proportionate enforcement for all industries. Guidance on the application of this policy is given in an Enforcement Management Model (EMM).

  7.2  There is evidence which suggests the approach to enforcement for the offshore industry is rather more relaxed than would be expected if the standards of the EMM were impartially applied. While it may be laudable to lead sinners to repentance, it must be acknowledged it may also be necessary to cast the recalcitrant into hell-fire. OILC and our members have seen examples over many months or even years of very similar unsafe practices within the same company. Too often they have attracted no more action from OSD/HSE inspectors than perhaps some written advice.

  7.3  We might almost believe that, in some cases, enforcement was conducted to some well established script. First the workforce complain of some safety concern; they are ignored and their concerns are derided by dutyholder management. Then OSD inspect or investigate and accept the concerns were justified. Assurances of improvement are given by the dutyholder, but these assurances are not honoured. Nothing is done, the same problem reappears, more complaints are made, more assurances are given and so the cycle continues—until someone is dismissed, injured, or worst case scenario, killed.

  7.4  The OSD Inspectors often appear reluctant to take such conduct into account in their dealings with dutyholders. They do not seem to understand that leopards rarely change their spots—even when subject to an Improvement Notice. The principle must surely be that Inspectors do not accept assurances from those dutyholders who have failed to honour previous undertakings. The impression given to the workforce and observers is that compliance is regarded as an unpopular and unnecessary option by both industry and Regulator.

  7.5  This pattern is exactly what happened on Brent Bravo. The Brent Field operator, Shell, had been the subject of workforce complaints since 1998 that equipment was not being properly maintained. A Shell internal audit in 1999 showed that key procedures and arrangements set out in the Safety Cases for many platforms were being ignored. Complaints continued through 2000-03 and in September 2003 two men were killed in an accident on Brent B. As part of the investigation OSD became aware of the 1999 audit and that many of the deficiencies found then had not been remedied. Many Shell operated platforms were not complying with the law or with their submitted Safety Cases. OSD did nothing. They subsequently accepted a number of Safety Cases submitted by Shell despite knowing that safety arrangements set out in previous Safety Cases had been ignored and that undertakings from Shell management were meaningless. Further evidence of non-compliance with Shell's safety arrangements was found in 2004 but little was done. By mid 2005 an internal OSD e-mail confirmed that on many Shell operated platforms little or no progress had been made to remedy serious safety defects found in 2003.

  7.6  More evidence for this apparent reluctance to enforce can be found in the KP3 Report on Asset Integrity. For almost 10 years OILC, other Unions and other interested bodies had complained of poor maintenance of offshore installations. OSD/HSE had investigated these on various occasions and on each had agreed action with the responsible oil company. In late 2007, OSD/HSE reported on the results of 83 inspections of maintenance arrangements and plant condition on offshore installations. Some installations were visited more than once and the report represents the state of rather less than half the total number of offshore installations. Nevertheless, the sample is sufficiently large be representative of the general condition of UK offshore installations. The Inspectors looked at 32 "elements" of maintenance management and physical plant condition. Not all elements were examined on each visit. Fourteen elements covered actual tests of Safety Critical plant. Of particular concern are the results testing three important safety critical systems. These are; fire pumps, deluge systems and Temporary Refuge Heating Ventilation Air Conditioning (HVAC) dampers. If there is a fire on an offshore platform all these must work to protect those on board. On Piper Alpha, the failure of deluge systems and smoke entry into the accommodation contributed to the high death toll. OSD/HSE report on tests of these systems made during some of their visits. Tests were not conducted on all visits. Indeed all 3 systems were tested on only 6 inspections. Only HVAC dampers were tested on more than half the visits (56). A third of these tests showed major failures or non-compliance with regulation. Deluge was tested on only 20% of visits but again a third of tests resulted in a major failure. On two platforms tests found major failures of both HVAC dampers and deluge. Where HVAC dampers or deluge systems were not functioning would, in our opinion, require immediate action by OSD/HSE to ensure the safety of the workforce. There is no evidence that this was done.

8.  ENGAGING THE OFFSHORE WORKFORCE

  8.1  The offshore workforce is mobile with substantial casualisation. The main method used by OSD to engage the workforce is through their elected safety representatives. Since 1989 there has been a statutory system of safety representatives on offshore installations. These representatives are not appointed by Trades Unions but elected by the workforce. Installation owners are required to consult these representatives on certain matters.

  8.2  This system has proved ineffective. Many installations have far too few properly trained safety representatives for effective representation of concerns or for meaningful consultation to occur. Consultation is superficial and workforce concerns are regularly ignored.

  8.3  OSD/HSC appear reluctant to take action to ensure that safety representatives are appointed, properly trained, properly consulted, or protected. We know of no enforcement action related to the appointment, training, consultation with, or victimisation of safety representatives.

  8.4  OSD/HSC appear to think that introducing legislation is all that is required. This is ineffective unless clear standards are set and enforced for the work of safety representatives and in particular for consultation.

  8.5  We suggest that the minds of industry could be better concentrated on this issue if OSD/HSC were to use the existing regulatory powers to "encourage" effective consultation and with it greater workforce involvement. As Lord Cullen put it in his report after the Piper Alpha tragedy; "The representation of the workforce in regard to safety matters is important not merely for what it achieves on installations but also for the effect which it has on the morale of the workforce—in showing that their views are taken into account and that they are making a worthwhile contribution to their own safety."

9.  REGULATORY CAPTURE

  9.1  To us "regulatory capture" occurs when the agenda for a Regulator is substantially influenced by the industry it regulates. We accept that HSE is at present a tripartite body and must by law seek the views of the industries it regulates. It has well established mechanisms to do so but these are not intended to favour the industry and its needs at the expense of the interests of the workforce. For the offshore industry there is evidence that industry interests drive the priorities and activities of OSD/HSE.

  9.2  Specific examples include:

  9.2.1  The membership by OSD/HSE of industry advocacy groups such as PILOT and the use of HSE resources in support of their aims. The aims of those bodies, even if they coincide with the interests of the Crown as owner of the reserves of oil and gas exploited by the industry, are not those that HSC/HSE was established by law to promote. Her Majesty and Her Ministers may safely be assumed to be able to safeguard Crown interests without the assistance of HSC/HSE.

  9.2.2  HSE's published Offshore Strategy gives the impression that OSD/HSE appear more concerned that their activities might inconvenience the industry rather than enforcing the message that safety is good business. No impartial regulator should tell us that:

    "The contribution of oil and gas to the UK economy is enormous"

  Or

    "Interruption of supply, for example through adverse unplanned events such as serious injury, accident or a hydrocarbon escape has a huge financial impact and potential social consequences. Therefore as well as being a high hazard industry, the offshore industry is still an important part of the UK's social and economic system"

  Whatever the meaning intended by the author, such language can only suggest that, to HSE, production comes first before the interests of the environment, the community or the workforce. We see little by way of a strong commitment to give health and safety issues any substantial weight, let alone to treat them as the first priority as industry pressure groups claim.

  9.2.3  The practice of OSD/HSE holding regular meetings with oil company and contractor senior management to discuss and agree enforcement initiatives without any workforce involvement.

  9.2.4  The apparent acceptance of OSD/HSE that to enforce safety regulation would result in an undesirable non-cooperation by the industry.

10.  LACK OF "JOINED-UP-GOVERNMENT"

  10.1  All offshore oil and gas reserves are owned by the Crown. Oil companies are licensed to explore for and produce oil and gas. They are, in effect, government contractors. The activities of these contractors are supervised by three sets of regulators. Technical matters are dealt with by the DTI, safety by OSD/HSC and environmental matters by the appropriate English or Scottish Agency. This, of itself, is not conducive to proper regulation.

  10.2  Our concern is that licences appear to be awarded without any consideration of the way in which potential licensees conduct their business. We complain above that many companies give meaningless undertakings on health and safety matters. They cannot be relied on to honour commitments. It would be reasonable to assume that a company that fails to honour undertakings given to one government department would also fail to honour undertakings given to another. Such companies are not fit to be awarded offshore production licences yet it appears this simple observation does not figure in the considerations of the DTI when awarding licences.







58   Review of Offshore Injury and Incident Statistics 1991-2006-An OILC Discussion Paper Back

59   Key Programme 3-Asset Integrity Programme (KP3), www.hse.gov.uk/offshore/kp3.pdf Back


 
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