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EEMUA – Engineering Equipment and Material Users Association: Collaborate Conference - 5 March 2015

Judith Hackitt CBE, HSE Chair

Judith Hackitt CBE, Chair of the Health and Safety Executive, will talk about the importance and challenge of managing and maintaining ageing assets. The benefits of getting it right will also be highlighted, along with the process safety issues that are vital to avoid catastrophic incidents.

Industrial Assets: Safer and Longer Operations

Good afternoon, I am pleased to have the opportunity to talk to you today at EEMUA’s Collaborate conference. I hope that throughout the event you will find useful points, new ideas, good practice examples and ongoing learning and improvement to take back to the day job. But the important thing is that you go back and DO, not just see the conference as an interesting diversion from the day job.

I worked directly in the major hazard industries for over 20 years. I know from first-hand experience how important this stuff is. Without exception, if your role process safety/asset integrity is not on your Board’s corporate risk register – it should be. Please ask yourselves whether you know the answers to what your contribution is and how well it is understood within your organisation.

40th Anniversary

Before I get on to process safety and ageing assets though, let’s briefly consider the background context to health and safety in Great Britain. HSE reached its 40th anniversary in January, a milestone also reached by the Health and Safety at Work Act midway through last year.

Are they still relevant and fit for purpose after four decades? Yes, they are. And that’s not just my view. The requests I receive from other countries about how we go about regulating health and safety, as well as the statistical comparisons demonstrate we have a world class system. We have not stood still during those 40 years, it has taken continual improvement and adaptation to keep at the forefront, much as it does in your own businesses.

Last year the triennial review of HSE was published. It did not question the fundamentals of HSE’s role or how it operates. But nonetheless we recognise that like every organisation we must always strive to do better. For your sector, much of that work has been encapsulated in the Focus on Enforcement programme but also in our careful consideration of how to implement Seveso III here in the UK. We have recognised that on this crowded island of ours it makes sense in some particular cases, to retain existing regulatory requirements even where the go beyond the requirements of the new Directive. This is being realistic and sensible about managing the risk in our particular operating environment.

But that’s enough background; let’s look at the current contexts in which Asset Integrity must operate.

Industry structural change

The Major Hazards industries have changed significantly in the last 20 years. Each sector has its own history, but there have been common themes of structural change, including

And how many new processes have entered the sector in recent years? – are the fully understood and risk managed from a process safety perspective?

The industry faces other challenges, such as development and supply demands in expanding areas. An ageing workforce and difficulties with retention are leading to a loss of skilled workers. It is important that sufficient process safety competence is maintained.

You’ll perhaps be pleased to hear that I’m not going to talk about Flixborough, Buncefield, Texas City and all those other well known cases. You know the consequences of process safety going wrong, and the role of asset integrity in avoiding nightmare scenarios. But please remember that just because memories of major incidents start to fade, it does nothing to reduce the risk of another catastrophe. Only you, your colleagues, your staff and the company leaders can do that.

But incidents continue to happen, some of which don’t actually surface as major events which are nonetheless very concerning. I don’t have time to tell you about a recent incident which although it didn’t end with a bang, did nevertheless leave a huge mess, which is still causing a headache for local public bodies in north Wales. Look up ‘Euticals Limited, Sandycroft’ when you get back from the conference.

Industry performance as a whole in managing major accident risk still isn’t good enough. Last year HSE investigated 115 incidents at major hazard sites, a significant number relating to loss of containment or other uncontrolled developments such as fires.  Whilst these are by definition “new” incidents over the last year, the causes are not new – making it clear that old lessons are not being learned and put into practice.

Process safety leadership

If you aren’t already familiar with them, please digest and act on the industry-wide Process Safety Leadership Principles. They advocate the use of leading performance indicators, publication of performance information and sharing of good practice across sectors.

And last October the Competent Authority published its Performance and Recognition Framework that describes how it takes business performance into account when planning its interventions. The Framework encourages use of the Leadership Principles – this provides an even greater incentive for your organisation to be using them.

Leadership for the major hazard industries

Another essential document to understand, and make sure those at the top are aware of is the HSE guidance on Leadership for the major hazard industries.

Whilst ’Collaborate’ shows there is some sharing of learning and good practice going on, unfortunately I have to report that overall there is little evidence that industry has taken the opportunity to do so, with limited progress in reporting on sector performance – all of which are cornerstones of major hazard leadership.

The newly established COMAH Strategic Forum has a role to play here, and offers an excellent opportunity for industry and regulators to make much needed progress. Whilst your companies may not be “front line” operators of major hazard facilities, you have an important role to play in all of this.

We must move away from process safety being seen as solely the preserve of the specialists, or a programme that’s added on or that applies to some and not others. We need to change the mind-set at the very top of organisations, starting with the Boardrooms. Unless we do this, major incidents will continue to happen which will cause substantial levels of casualties to employees and members of the public, major environmental damage, loss of assets and the ability to produce. Boards that do not take leadership in understanding their role in process safety and asset integrity have a very serious gap in their Corporate Risk register and are potentially taking a gamble with the survival of their business, possibly without even realising it. 

Your conference focus is on Safer and Longer Operation of Industrial Assets. We all know that maintaining asset integrity is central to avoiding loss of containment and is at the heart of major accident prevention. Effective day-to-day management and the right long term investment decisions are essential. It is a long established and well-known issue, but it continues to be a major challenge. 

It’s an area where that Board level leadership is vital. There is no doubt that leadership can be a challenge – especially in changing or turbulent economic times. The current low oil and gas prices may lead some boards to make short term decisions about cutting “discretionary costs” – and if those discretionary items include essential maintenance work, it is very possible that the decision will be to delay expenditure in the short term – but what are the long term consequences?

Asset integrity, the decay and aging of process plant and equipment, is much harder to regain than it is to maintain. Leaders must make the right decisions now, not to cut corners for the short term and put the long term at risk.

Focussing on the right priorities is also about understanding the true nature of the catastrophic risks in the business and having the right measures in place to provide assurance.

And this isn’t just a theoretical problem, it’s an issue that we cannot be confident is being properly managed at over two-thirds of COMAH sites. Let me explain how I can make that bold and frankly worrying statement…

It’s not on a whim or a feeling. Here’s the background: Research carried out for HSE during 2008-2010 clearly identified ageing infrastructure and equipment as key contributors to incidents at onshore major hazards sites. As a result, the subject became a strategic priority for the COMAH Competent Authority.

Integrity management

So HSE developed a revised approach to integrity management, introduced in 2010. It has three clearly stated aims:

Since this strategic programme has been running we have identified some key issues and also made progress on addressing them.

The key finding which sticks out for me, that I alluded to moments ago, is that 70% of all sites we have looked at need to improve in at least one area of ageing management.

So, what needs to be done by industry?
Leaders, senior managers and of course engineers have a vital role to play in focusing effort and resources into integrity management and ageing plant.

They need to:

Plant inspections

One particular issue which we have identified is that onshore sites that use third parties to provide ageing plant management services (particularly plant inspections) are delivering significantly poorer performance when it comes to management of plant ageing.

Third party services are frequently contracted through a site’s insurance company or broker. Not a problem per se provided that the service provider is competent to inspect plant requiring greater expertise than generic equipment  – but that isn’t always the case. There are distinct differences, greater levels of expertise and access to more information required by those who are engaged to carry out detailed plant integrity inspections and go beyond what is required for inspection of generic equipment.

Failure to recognise the different competencies required for integrity management are a frequent cause of inadequate arrangements being put in place. Integrity management inspectors must have access to and be able to interpret details of specific process conditions and environment for each item of plant in detail. Almost inevitably, such a service is going to cost more and may even require different third parties to be contacted to do the work. This means that the client must be an intelligent customer who can:

Simply ticking a box to say that an inspection has been done is by no means enough.

I do recognise that there are some good examples of where industry is taking the lead on process safety issues, such as the Joint guidance published by EEMUA & SAFed , which HSE has endorsed, covering primary containment as well as leadership and resourcing. But significant improvement is still needed across the industry; I want you all to be part of ensuring that your organisations are doing their bit.

In other areas, growth in sectors such as biological agents and explosives creates new asset integrity challenges as new technologies are introduced to allow increased production without affecting surrounding land use. This too requires mindful leadership and the effective process safety and asset integrity that can flow from it.

COMAH 2015

Finally, I want to cover some regulatory issues. Later this year the Control of Major Accidents Hazards Regulations (COMAH) 2015 come in to force, implementing the Seveso III Directive. It maintains the essential elements of the current regime, whilst introducing more modern requirements for provision of information to the public. 

And the European Regulation on classification, labelling and packaging of substances and mixtures (CLP) comes fully into force on the 1st of June, which may result in some sites coming into the scope of COMAH for the first time, others may drop out and some sites may move between tiers. 
COMAH site operators will have to provide information to the public in a permanently available and electronic form.

The implementation of the new regulation and the requirements for publishing information combine to give you a great opportunity to raise the profile of process safety in your organisation, ensuring the published information is widely understood throughout your own organisation – from top to bottom.

COMAH regime improvements

And how the COMAH regime operates is changing for the better. Since the Focus on Enforcement report was published in early 2013, HSE, the Environment Agency (EA) and industry have worked to deliver a number of improvements. For example:

There is still a large part of the chemical industry in my blood – figuratively not literally, I hope.  We, as regulators are here to help you to be successful, to enable growth and prosperity not to stifle it. Operating safely and sustainably is not about luck or taking chance, it’s about getting it right all of the time and for us, that means we sometimes have to tell you things you’d rather not hear. But the truth is you should be doing this for the sake of your business and its future prosperity, not because we tell you to do it – that’s what real leadership is all about.

Questions

Please continue your active participation in the conference and as soon as you are back in the day job, take something from the event to make a difference in process safety. Don’t put it off.

Thank you.

Updated 2016-02-09