5 Commercial pressure
49. The extent to which oil and gas companies influence
safety standards is fiercely contested. BALPA stated that oil
and gas companies enforce cost-cutting in the helicopter operator
market by structuring contracts to include a 90-day notice period
for termination of contract. However, the contracted operator
is normally tied to the contract for a period of years. That allows
oil and gas companies to threaten operators with market-testing
exercises and to pull out of the contract at short notice, if
their market testing finds another operator to undercut the price.
Secondly, BALPA contended that oil and gas companies artificially
distort competition in the operator market by providing financial
backing to new entrants, which forces existing operators to cut
costs to compete.[77]
50. Oil & Gas UK flatly rejected BALPA's observations.[78]
Helicopter operators argued that commercial pressure from their
customers does not affect safety standards. Mike Imlach, Director,
Bristow Helicopters stated that "I can honestly say we have
never been under commercial pressure where we have felt it is
unsafe to continue a flight."[79]
Luke Farajallah, Managing Director, Bond Offshore Helicopters,
told us that his company was adept at keeping commercial pressure
away from pilots and were able to "ensure that our contractual
relationships do not lend themselves to any commercial pressure".[80]
The CAA review directly contradicted the arguments advanced by
Oil & Gas UK and by the helicopter operators:
All the helicopter operators reported that customer
influence in operational matters was too extensive. The perception
that contracts are offered at too short a timescale and awarded
on lowest cost is also prevalent. The CAA considers that this
may reduce a helicopter operator's capacity to recruit and train
for a new commitment, and may challenge standards in the drive
for a successful bid.[81]
Public inquiry
51. Trade unions have campaigned for a full public
inquiry into offshore helicopter safety, which they believe is
the only measure that would restore the work force's confidence
in helicopter safety.[82]
The RMT suggested that a public inquiry should examine:
· Comparisons
of the UK safety record and standards of helicopter companies
with their counterparts in the Norwegian sector of the North Sea;
· Trade union
access to berths on helicopters;
· The extent
and effectiveness of training requirements for helicopter pilots;
and
· All operational
aspects of helicopter transport, from maintenance regimes through
to survivability.[83]
With the exception of the second point, the CAA review
examined those issues in detail. Mark Swan of the CAA was ambivalent
about a public inquiry. He stated that the CAA review was comprehensive
and had not missed anything significant, although a public inquiry
was for the Government to decide.[84]
While we agree that the CAA review was strong, we do not accept
that all the significant questions have been answered. The Aviation
Minister rejected a need for a public inquiry and stated that
it would delay action and have little value.[85]
Robert Paterson of Oil & Gas UK told us that following the
publication of the CAA review and of the AAIB investigation into
the Sumburgh crash, there would be an "opportunity to look
carefully at what we may need to focus a public inquiry on."[86]
We reject that argument, because a public inquiry should consider
the outstanding strategic issues and not replicate the AAIB investigation
into the Sumburgh crash.
52. BALPA has called for a tightly focused public
inquiry to consider the issues outwith the CAA review. Its proposed
inquiry would examine
· the
control of the offshore helicopter industry by the oil companies
who charter services from the helicopter companies; and
· the effectiveness
of the UK Civil Aviation Authority (CAA)'s regulation of the offshore
helicopter industry against a background of six serious accidents
in the UK offshore helicopter sector in the last seven years.[87]
53. Mark Swan acknowledged the criticism that the
CAA failed to examine its own role:
There have been calls of, "Well, hang on, CAA.
You haven't looked at yourself and how good you are at your job."
Clearly, that is for others to remark on, not me.[88]
The CAA's role is key to offshore safety. Any review
which failed to examine it cannot be considered complete. It would
obviously be inappropriate for the CAA to lead on such work. The
DfT and regulators have failed to ask searching questions about
the wider commercial culture in the North Sea operating environment,
particularly concerning the pressures on operators and their contractual
obligations to customers. Only a full independent public inquiry
will have the resources and powers adequately to examine those
issues.
54. The CAA review did not consider the evidence
that commercial pressure impacts on helicopter safety in sufficient
depth. The Government must convene a full, independent public
inquiry to investigate commercial pressures on helicopter safety
in the North Sea operating environment. That inquiry must also
examine the role and effectiveness of the CAA. In addition, the
DfT must commission ongoing independent research similar to the
SINTEF reports in Norway to examine improvements and threats to
offshore helicopter safety. Once published, this research should
be laid before Parliament for consideration.
77 BALPA (HCS0012) para 5.1 Back
78
Qq72-76 Back
79
Q21 Back
80
Q12 Back
81
CAA, Safety review of offshore public transport helicopter operations in support of the exploitation of oil and gas
(February 2014), para 13.3 Back
82
RMT (HCS0015) page 1 Back
83
RMT (HCS0015) para 1.1 Back
84
Q134 Back
85
Q156 Back
86
Q87 Back
87
BALPA (HCS0012) para 1.3 Back
88
Q134 Back
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