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Oil & Gas UK PIPER 25 - Tuesday 18 June 2013

Judith Hackitt, HSE Chair

It is quite daunting to be standing here today in front of so many people. I want to congratulate Oil & Gas UK on taking the initiative to organise Piper 25. It is less than a month now to the 25th Anniversary of the Piper Alpha disaster. In common with everyone else in the room, I recognise the significance of this anniversary as we remember and offer our sympathies to the families, friends and work colleagues of the 167 workers who lost their lives on that tragic day.

I listened with great interest to Lord Cullen’s reflections on Piper Alpha and there is no doubt that the changes which were made to the offshore safety regime following the tragic events of 1988 have had a lasting impact on all of us and the way we work today. The legacy of the disaster lives on with all of us. It is significant that there are people here today attending this conference from around the globe and I am sure that over the next 2 or 3 days many will share with us the lessons they have learned. The key question however is not so much about what we have learned as what we have done as a result of that learning and how well we have embedded that into what we do today and in the future.

There are some key principles which I am confident that most, if not all, of us would agree:

But in this keynote address, I want to consider the challenges we all face today and longer-term: how do we stay true to the abiding principles introduced by Lord Cullen but in a world which is substantially different from that in 1988 and which continues to change and develop at an ever faster pace? Maintaining continuity with those things from the past, which still hold true but adapting to the ever-changing environment, will be the key to a successful and safe North Sea – and to offshore operations around the globe.

What are some of the issues which challenge the offshore industry today an in the future?

Ageing assets are a key issue. Many installations are now operating beyond their design life but we are also seeing new assets and new techniques being deployed.

Drilling is taking place in ever deeper water and more hostile environments.

Technology has developed to enable enhanced oil recovery,

There has been a significant increase in smaller operators entering the sector and in outsourcing of operations.

The demographics of the offshore workforce continues to change – international offshore crews will disperse around the globe when they come ashore, workforces are mobile and multicultural.

Knowledge and experience is being built up around the world, but how good are the mechanisms which are in place to share that knowledge?

Events which have taken place since Piper Alpha all point to some significant shortcomings and gaps which need to be filled.

We also need to recognise the broader context in which we operate. Attitudes to both safety and environmental protection have changed with significantly lower levels of tolerance of failure.  The rapidly changing economic and financial environment is a key driver of investment decisions. Other technological developments can and will have a significant impact on offshore operations. Shale gas development, new nuclear build and generation, offshore wind farms will impact upon demand, compete for investment resources and create a broader landscape over which we need to share knowledge and experience which is transferrable.  The effect of some of these factors can be swift – For example, Europe’s legislative response to Deepwater Horizon, but the effects of others such as long term investment decisions are less immediate but certainly no less profound. 

It is against challenges such as these that we have to constantly ask ourselves what are the implications of these developments and what should our response be against the yardstick of our longer term shared goals and principles.  Put another way, the “what” remains constant but the “how” needs to be responsive and keep pace with a changing world.

Being a chemical engineer, it is not often I find myself quoting Charles Darwin but the following words from the great naturalist illustrate my point perfectly:

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

Learning from the past is vital and some of the time at this conference will be spent reflecting on how we need to get better at embedding that learning from the past. But it is equally important to recognise that being trapped by the past and locked into a single way of doing things is folly. 

We need to seize the opportunity to understand some of the new approaches adopted to manage major hazard risks. For example:

But learning and knowledge, vital though they are, are only a prelude to the main act which is action – using that learning to shape what we do differently to improve. By the time we all leave this conference on Thursday, we need to be clear about what we are all going to do and how we are going to do things differently to be more effective. The greatest homage we can pay to the past is to demonstrate that we have truly learned and are taking those lessons forward. If we can do that, this 3 day conference will have been truly worthwhile, but lets be clear that this is a call to change our approach and act differently going forward. Let me explain why.  I have read Lord Cullen’s report, and the reports on Deepwater Horizon, Nimrod, Texas City, Buncefield – the list goes on.  Whilst the precise circumstances and contexts of these incidents differ in some respects, at heart I am left with the feeling that there are no new accidents.  Rather there are old accidents repeated by new people.  I want us all to walk away from this conference recognising that our learning and knowledge sharing needs to improve, and determined to end this cycle of repetition.

It is precisely because of that need to learn, adapt and improve that I believe one of the most important  principles to emerge from Piper Alpha, from a regulatory perspective, was the introduction of a goal setting approach to offshore oil and gas work activities. This approach was designed to ensure that operators working in the offshore industry were legally required to take steps to continuously improve how they managed offshore safety. The new Directive on the safety of offshore oil and gas operations will require that this key principle is adopted across Europe. The extensive work we all did to successfully negotiate for a Directive, rather than a direct acting Regulation, will help to preserve this fundamental concept. Having said that there is the challenge of how to integrate environmental risks into the approach and supporting Safety Case.

So why is a goal setting regime so important?

Goal based regimes place the onus on industry to ensure and demonstrate to regulators that the risks of any incident relating to oil and gas operations are reduced to ‘as low as reasonably practicable’. We have seen that a more prescriptive approach can shift the burden of responsibility from the operator to the Regulator. The operator relies on “the rules” to tell them what to do  and to measure whether or not they are “in compliance” rather than developing and continuously reviewing their own analysis of what is required in their own particular circumstances with an effective, competent regulator to mark their homework!  Going back to what I said earlier, the prescriptive approach tends to lock us into the past (the moment when the “rules” were written) and inhibits taking advantage of technological innovation, new learning etc.

Of course a goal setting regime needs to be balanced with the provision of clear expectations of what are acceptable standards. The very nature of the safety case permissioning regime is built upon the need for operators to demonstrate to regulators that acceptable standards are in place. But guidance is an important route to setting those standards - all the better if it is guidance that is developed in partnership by all the key players so that all feel true ownership of the expectations it sets. It is in this area that I feel that the offshore Industry, in partnership with others, such as the Well Life Cycle Practices Forum and through Step Change has been very effective. Guidance, and toolkits, on deepwater drilling, assurance and verification, asset integrity and on workforce engagement are just some examples of this. The development and continuous updating of such guidance is key to continuous improvement  But given the global nature of the oil and gas industry we need to ensure that learning and improvement is global.

To that end it is also important that Regulators meet regularly to share good regulatory practice, share intelligence on operators and learn lessons from incidents. Until recently the two key groups were:

Recently, the European Commission has established the European Union Offshore Oil and Gas Authorities Group. The Commission want to build on the experiences of the North Sea Offshore Authorities Forum, and created a truly European–wide forum for the exchange of experiences and expertise between offshore regulators.  The Commission will use this forum for discussion on the implementation of the new Directive, to ensure consistency of approaches, to network with the industry on European-wide issues and to stimulate continuous improvement – particularly in countries with emerging offshore sectors in the Med and Black Sea. I hope this forum, in time, will be as effective as the others at sharing lessons, knowledge and experience from a regulator’s perspective.

I made reference earlier to the Step Change workforce engagement tool kit.  This was developed by the offshore industry to help in measuring and improving workforce participation in delivering safety performance at offshore worksites. We simply cannot talk about continuous improvement, and how this can be achieved, without recognising the important role of the workforce. That is why Step Change and the Workforce Involvement Group of the Offshore Industry Advisory Committee have been exploring the steps that need to be taken to achieve improvement in workforce involvement offshore.  They have jointly organised the workforce involvement day to be held here in the AECC tomorrow for 500 offshore workers.

HSE believes that safety representatives are a real force for improving health and safety in all workplaces, not least of course in the offshore industry. Last year, HSE finished an inspection programme to assess compliance with the Safety Representatives and Safety Committees) Regulations 1989.  This work programme identified a lot of good practice that could be shared across the industry.

Workforce involvement is just one aspect of a good organisational safety culture, and safety culture is one area where all offshore regulators agree is critical to securing long-term improvements. We cannot underestimate the difficulties of addressing this offshore. In practice it means trying to win the hearts and minds of workers who are often not directly employed by the offshore installation operator and who are increasingly from different international cultures. Safety culture cannot be achieved through legislation.  Rather it is the combination of many factors including leadership and competence which translate into a set of behaviours at all levels in an organisation. It is often encapsulated in the phrase “it’s the way we do things round here”.  What I am absolutely sure of is that effective and committed leadership from the very top of the organisation is crucial to achieving that safety culture

Strong leadership has got to be placed at the front and centre – because without leadership other essential elements of the system – employee engagement, increased competence – simply do not happen. Everyone needs to recognise their responsibilities and then play their respective parts – regulators, operators, employers, employees and many more.

Strong leadership is also required to ensure that the resulting good practice is embedded within the industry longer-term, no matter where the work is carried out. Strong leadership will also ensure that organisations evolve to meet their new challenges and strive to continuously improve. If we are successful, our regulatory regime will remain robust, safety standards offshore will continually improve and we will create a culture where contractors and workers realise the benefits of effective co-operation. Strong leaders will also look beyond their own company or sector to learn lessons, to pick up and share good practice with others.

The principles of learning, reflecting and adapting are as true for the regulator as they are for the industry. To remain effective in regulating an industry which continues to  evolve, the regulator itself has to adapt and change – whilst of course holding the key principles of the regime intact. Some of the continuing challenges for the regulator are:

The answers to these questions are the tests against which regulatory effectiveness should be judged.  Internal structures are much less important. HSE has recently created an Energy Division and I am very much aware that this has raised some questions among our stakeholders. Today is not the time for me to go into details of those changes but I do want to assure you all that the resources we devote to offshore safety will be enhanced, not depleted, by the changes we are making.  In fact, the clearest sign of our commitment to offshore safety is that we are recruiting new offshore inspectors to HSE right now.

Ladies and gentlemen, I began this talk, by saying that this is a big occasion which marks a very solemn anniversary. But this is also a major event for the whole oil and gas industry which continues to operate in some of the most challenging environments around the world. It is exciting, it is advancing technologically, geographically and culturally. Learning the lessons of the past is not a choice but an absolute must and we still have some way to go to embed this. But there is even more to do - we need to apply those lessons to the present and to the future and look beyond our own horizons for other good ideas.

I hope that this conference will honour those men who lost their lives 25 years ago by committing afresh to developing a global safety culture in this industry which responds to the challenges we all face in the 21st century.

Updated 2013-07-16