Thank you very much for the invitation to join you today. I very much value opportunities to speak to companies such as yours which are not only committed to excellence in health and safety but also have a widespread influence in industry.
Babcock has a particularly significant role because of the diversity of sectors in which you operate, including the marine, defence, nuclear and rail industries.
My belief is that excellence in health and safety is achieved through culture and passion, not rules and systems. It is passed on within organisations and between them as one team seeks to emulate another.
And that’s why leadership is critical. Individuals or groups who take a clear lead trigger chain reactions that can have positive impacts way beyond their own business.
So in my remarks I’d like to cover three broad areas:
So first a bit of background on the national context. I am pleased to say that Britain is a leader in health and safety. The latest figures show the EU average rate of work-related fatal injury, excluding road accidents, running at around 2.5 per hundred thousand workers. The British rate by contrast is 1.3, which is the lowest among EU member states. Other countries look to us for leadership and many seek to adopt our approach.
But it hasn’t always been this way. Back in the 1960s it was not unusual for the country to have 1,000 workplace fatalities a year. But last year they fell to a record low of 180. This improvement has been associated with an increasingly rigorous and discerning approach to health and safety.
The foundation for this was the Health & Safety at Work Act of 1974. And the Act has subsequently been built upon with significant progress in personal safety, product safety and process safety.
However, having the best record in Europe and reducing fatalities to 180 per year means absolutely nothing if you are a relative or friend of one of those 180 people. It doesn’t mean much either if you are one of the 2,000 or more employees who suffer injuries at work every week or one of the million or so whose health has been affected by their work.
So we must carry on trying to improve. But it does get more difficult. Moving from very good to excellent is one of the most difficult challenges for any organisation. Making progress requires new levels of commitment and innovation – it is about winning hearts and minds not rules and procedures.
So this was one reason why the Board of the HSE two years ago decided that we needed to renew our strategy for health and safety in Great Britain.
There were other reasons too. Workplaces are changing fast. The number of small and medium sized companies is expanding, many of them working in high risk areas without the expertise available to larger companies.
And we have seen an increasing culture of risk aversion in society. For too many organisations, health and safety has become synonymous with petty regulations instead of a focus on the most important risks.
We launched the updated strategy for health and safety about a year ago – stressing that while it had been led by the HSE, it is very much a strategy for everyone who is part of the system in Great Britain – and we want it to be owned and applied by all.
This is why we sought inputs from many organisations and consulted widely. It’s also the reason why we have asked organisations to show their support for the strategy publicly and provide case studies to show how they are implementing it – I noted that Babcock has not yet joined the more than 1,500 signatories to our online pledge, but I’m sure that is an oversight!
The principle of ownership is central. It is for those who create risks to manage risks. The HSE has a role in inspecting, investigating and enforcing. We also have a role in developing strategy, providing information and guidance and updating policy and regulations. But it is not for us to prescribe how to manage health and safety in individual organisations. It is for individual organisations – what we call ‘duty-holders’ – to manage the risks they create – to decide what is reasonable and what is practical.
So what else does the strategy say? Its key points are that an effective health and safety system requires strong leadership, workforce engagement and widespread competence and expert advice.
Of all of these things, leadership is by far the most important because without leadership the other things simply won’t happen – the workforce involvement, competence at all levels, prioritisation of hazards and risks. These things happen because leaders make them happen.
And there should be no question over the value of leadership in health and safety. Not only does it lead to a reduction in numbers of people being harmed. But it also leads to a major reduction in the cost of accidents, fatalities, injuries and ill-health, and to a major potential improvement in motivation and productivity. It is not by accident that those companies who are good at health and safety are also those that are run well, are successful in business terms and have a good reputation as employers and as corporate citizens. That is why we are increasingly focusing our guidance on “Leadership and Management for Health and Safety” not “Management of Health and Safety”. Different outcomes come from the same root strength.
If you think safety is expensive, think for a moment about the costs of a major accident – in lives, livelihoods, fines, compensation, morale and reputation.
So leadership is vital – but what does it consist of? The starting point is the vision of the organisation and its view on the world – its mind set. These will influence greatly its behaviours. As a result, excellence in health and safety should be seen as part of any vision of sustained excellence for the organisation. This does not mean “gold-plating” – far from it. But what it does mean is that it is part and parcel of “what we do round here”, “what we do when no one is looking or checking up on us”. Seeking excellence in health and safety is about it being ingrained and being second nature – developing a positive, dynamic, all embracing safety culture.
You can’t achieve that through process and procedures – it has to be based on effective leadership from the top and taking a range of interventions across the company that embed a health and safety mindset in every employee.
I’ve taken a look at what you do here in Babcock and I think you are absolutely right to have a safety leadership team which consists of your executive team – but which meets separately to the executive committee meeting. This clearly gives health and safety a special place. It also seems to me to position health and safety not as one issue among a series of issues, but as a cross-cutting theme which has to be applied to every team, every project and every activity.
And looking at your record, I see that your experience broadly reflects that of Great Britain in that you have driven accidents and injury rates down – and you now face the challenge of moving from very good to excellent.
I see you have set a target of reducing the accident frequency rate by 50% this year. That is clearly ambitious, and I hope it is having the effect of raising the profile of health and safety and uniting the organisation in a common pursuit.
Beyond questions of structures and targets, there is the question of setting priorities within health and safety. This is an issue of what is measured and what questions are asked.
I believe it is far better for the Board of an organisation to have a quarterly or six monthly in-depth review than a monthly look at a set of lagging indicators. A review of monthly performance provides a very limited view of potential problems.
It’s encouraging if there have been no injuries or major incidents but a retrospective review doesn't necessarily tell you whether this was down to luck or good management. It is essential that the Board asks the right questions of the right people about future risks. Asking the right questions enables us to seek out areas where the organisation is vulnerable, rather than being assured that all is well.
Moving from good to excellent requires the development of leading indicators and in order to know what leading indicators to measure you have to understand the real DNA of every business.
Once the key risks are identified, leaders then have a responsibility to involve the workforce in understanding and identifying ways to mitigate them. It is important to have employees who are competent and confident in dealing with the things that really matter and who feel they are engaged constructively in managing health and safety.
This requires specific, tangible interventions that empower individuals. And I note that you have initiated such interventions in Babcock, for example through your bold targets, your incident reduction programme and your 'Home Safe Every Day' message.
I also see that you have an online best practice forum, in common with many leading companies in this field. This type of tool can really make a difference by enabling teams to benchmark their performance and share experience.
The key for me is winning hearts and minds by motivating and coaching everyone to play their part, rather than ‘beating the drum’ in a way that only works as long as you continue to beat it.
Moving on to the idea of leadership within industry, your position as a contractor in several sectors gives you the opportunity to influence a diversity of private and public sector clients, many of whom are large and conduct work which is important to the national infrastructure – from defence to energy and transport.
One recent example which I encountered personally demonstrates the potential for contractors to play a pro-active role. The work was carried out by a demolition business on behalf of a major oil company. As part of the contract, the demolition business was required to comply with much higher standards of health and safety than they had previously experienced. But rather than finding this restricting, they discovered that working to this regime was an 'eye-opener' into the benefits of good, practical health and safety. Not only did it minimize risk, but it maximized efficiency.
The demolition company then carried this experience into other contracts, applying a similar regime, whether or not clients insisted upon it. Effectively this meant that they were acting as an advertisement for good health and safety among a community of clients.
I see that Babcock is aware of the potential to have this type of influence – for example having a safety culture assessment questionnaire which is designed not only for your employees and contractors, but also for your customers.
Large clients and their communities of contractors can be powerful role models.
Another example I have been struck by recently is the Olympic Delivery Authority for the London 2012 games. The ODA has an explicit commitment to being a health and safety leader. It has clear performance objectives. It audits suppliers to ensure they meet its standards. Contractors have to participate in a leadership forum and workers are engaged through toolbox talks, briefings, near miss reporting, surveys and awards.
The ODA has also appointed an external delivery partner to monitor progress. In my view, those are all leadership actions and ones that both clients and contractors should seek to embed in their projects. I already know that some of those involved in the Olympic project are discussing how they can hold onto the culture they’ve created and take it with them as they disperse onto other projects.
Reducing the likelihood of high consequence/low probability events that can have catastrophic effects on businesses and surrounding communities and can even threaten the national infrastructure is one HSE’s strategy goals.
You have an important role in industries which present major hazards and where process safety is paramount. This is an area where a lot of recent progress has been made and I will just make a few observations on what we see as key issues today.
Thankfully, catastrophic events happen rarely. This fact, however, can cause a dangerous and insidious level of complacency to develop that can lead to ill-informed strategic decision making. This has been seen repeatedly as a contributory factor in a number of major accidents and was again most recently highlighted as a significant factor in the Nimrod Inquiry Report.
Similarly, but at a more practical level, process automation and management system issues need to be considered. These systems have brought serious benefits to industry but they need to be used with the caveat that systems never tell you everything.
Accidents often occur because something unusual happens or factors combine in new ways. We have to guard against a false sense of security created by automation and smart machines and give increasing priority to how well people are trained to deal with excursions from the norm.
We have to ensure that knowledge and design principles are recorded, understood and passed on. It is often the changes that are made with the best of intentions which compromise safe design principles which have been forgotten or overlooked.
While every industry has its own particular risks, I am often struck by the similarity of the challenges faced by different sectors – ageing facilities; skills shortages; loss of knowledge and corporate memory; cost and production pressures; changes of ownership – the list is a long one.
My question to you is: To what extent are you sharing best practice across the sectors in which you operate – given your experience of the common issues? Questions such as: How should asset integrity be strengthened in ageing facilities? How can corporate memory be preserved as workforces are replenished?
You may be doing a huge amount already - but it is worth thinking about whether the substantial collective experience of this organisation – indeed the experience in this room – can be harnessed in any new ways for the benefit of all the industries in which you work.
I’m aware for example that Babcock has multiple perspectives on the UK’s nuclear industry. You play a significant role in the nuclear defence programme and as such are well respected by the Nuclear Directorate of HSE. You also have a long-standing role in supporting the operators of the UK's existing reactor fleet in addition to your work in helping the industry to deal with its legacy plants. This portfolio gives you a unique overview and valuable experience.
We will therefore welcome your participation in implementing the regulatory strategy for Leadership and Management for Safety which has been developed by the HSE's Nuclear Directorate. The strategy draws on lessons from events such as the Columbia space shuttle disaster and the explosion at BP’s Texas City refinery.
It sets out to promote awareness of the contribution that leadership, organisational and cultural factors make to safety and to influence leaders up to and including the boardroom. Indeed, I’m aware that inspectors from the Directorate met with your management team at Devonport Royal Dockyard to discuss this recently.
I want to end by highlighting a couple of health and safety principles that I think need to be applied at every level – from the individual or team to the organisation or sector. These are both reflected in our strategy and they are: first, personal responsibility; and second, proportionality.
Real leadership is characterised by skills and competences which go beyond technical expertise. Passion needs to be combined with exceptional people skills, the ability to influence and motivate – and above all to communicate in language that is meaningful to people.
And I believe it is important that directors and managers adopt an approach that is personal as well as process-driven. It is vital to get out and about – to visit workstations and talk to staff. If you don't like what you hear, resist the temptation to go on a witch-hunt - take personal responsibility for creating a culture where concerns can be expressed and solutions found. It's quite possible that you may solve the problem simply by listening to your employees!
The second principle is proportionality. As you probably know I am personally very committed to ridding health and safety of the image of bureaucracy, interference and stopping things happening. The HSE’s mission is the "prevention of death, injury and ill health to those at work and those affected by work activities". Our role includes developing national strategy, recommending policy and inspecting working environments from offshore oil production to the nuclear industry, construction to agriculture. In other words, it’s about major risks and mitigating them. We do not ban conkers, Morris Dancing or plastic duck races. You know we concentrate on what matters.
Health and safety management is not about elimination of all risk – it is about doing what is ‘reasonably practicable’ to manage foreseeable risk and then getting on with the task. An array of glossy folders containing 10 page risk assessments for the most trivial of risks are counter-productive. They create cynicism amongst employees instead of inspiring them. What inspires is a clear focus on major risks and a practical, commonsense approach to managing them.
You may be interested to know that within HSE we have an Emerging Energy Technologies team which is working hard on developing a regulatory framework which will enable Carbon Capture and Storage, Offshore Wind generation and other new energy technologies to be built and operated safely. New and emerging risks need to be understood and managed, but continued innovation and technological development is vital.
Thirty-six years ago when the Health & Safety at Work Act was passed, apathy was identified as the enemy of progress. Since then, we have made enormous progress. We now have the best health and safety system in the world. We must not be complacent though but instead seek to improve, learn from others and events, and never stop being aware of the risks. In moving from very good to excellent, I would identify one of the major challenges to be the development of sustained excellence in leadership based on common sense and passion.
In driving our performance to a new level we need to encourage hotspots of excellence – where committed leaders set the right priorities, take personal responsibility and promote a proportionate approach. Those hotspots can then radiate good practice to all those whom they influence.
I believe your diverse activities across a range of strategic industries enables your organisation to be a real centre of excellence and – where necessary - a champion for change. I want to thank you for your commitment to health and safety and your support for the national strategy. Let’s redouble our efforts to put into action on behalf of everyone who works for us and - to use your phrase - to make sure everyone comes ‘Home Safe Every Day’.