OSD Operating Plan 2007 – 2008

Purpose and Background

1.1 Purpose of Document

1 To set out Offshore Division’s Programme of Work for 2007 to 2008. It describes what the programme is, how it fits in with wider HID and HSE work, the targets to be achieved, the activities to be carried out and the resources to be used. Links to additional information are in the Annex - Futher Information.

1.2 Background

2 The offshore upstream oil and gas industry is a major contributor to the UK economy and is dominated by large international companies. It is characterised by innovation and rapid technical change, while at the same time operating on the basis of fundamental processses which have changed little since the early days in the development of offshore oil and gas. The maturing nature of the United Kingdom Continental Shelf (UKCS) however presents particular and increasing challenges to the delivery of high standards of health and safety. These include:

pressures to reduce operating costs,
shortages of skilled and competent staff exacerbated by increases in exploration, increased maintenance demands, plant upgrades to improve efficiency and increased world wide activity,
an ageing workforce,
declining production from an ageing infrastructure,
an increase in smaller independent oil companies who tend to be more dependent on specialist contractors,
technical challenges in exploiting new small fields safely and economically, getting more from existing fields and exploiting reserves previously regarded as technically too challenging,
maintaining infrastructure to maximise the exploitation of reserves for the benefit of the UK.

Strategic Fit

2.1 Objectives

3 OSD contributes to the delivery of the higher-level Strategic Programmes, which support HSC/E’s aims and objectives for major hazards. The assessment of outcomes in 2008 will provide evidence for the resources needed for future activities.

4 The Offshore Programme will be delivered by HID’s Offshore Division. Some work that does not directly contribute to the Programme is also delivered by the Division, including:

non-oil/gas industry related diving work,
onshore wells for hydrocarbon extraction and storage,
food hygiene offshore,
reactive work associated with the offshore wind energy industry,
reactive work associated with stacked offshore installations
support to Chemical Industries Division for onshore major hazards,
liaison with MCA, MAIB, CAA and AAIB,
the FIT 3 Programme and
support to other government priorities, including civil contingencies and security.

5 OSD aims to help HSE meet the HSC/E’s vision of Great Britain leading the world in the control of major hazard risks. OSD will seek to achieve this by the following objectives:-

to prevent major accidents with catastrophic consequences,
to secure a step change improvement in the incidence of injuries and work related ill health,
to work with industry in support of its ambition to make the United Kingdom Continental Shelf the safest offshore sector in the world by 2010,
to secure more effective offshore workforce involvement, and
to maintain an effective regulatory framework.

6 The Offshore Division Programme will deliver the Major Hazards Strategic Programme’s communication objective within the offshore industry. This is: ‘to raise awareness of the effectiveness of the health and safety regulatory regime for major hazards, in order to build and maintain public and wider stakeholder confidence in it.’

7 The communication strategy sets key messages and communication objectives for HSE, both internally and externally, so that we can work as an enabler and motivator across the health and safety system.

2.2 Outcomes

8 To achieve our objectives we aim to:

undertake our core activities:
1. assessment of offshore safety cases,
2. testing the veracity of safety case content by planned interventions,
3. using safety case notifications and thorough reviews to direct interventions,
4. planned inspections,
5. investigation of incidents and complaints,
6. enforcement and
7. providing advice.
maintain the value of the safety case by ensuring cases are kept up to date through planned inspection; and by examination and testing the rigour of the thorough review process for safety cases,
develop and implement targeted projects and initiatives aimed at currently identified priority areas of major hazard control,
deliver our PSA targets,
work with stakeholders to encourage the identification, development and adoption of good practice and standards, including development of health and safety performance indicators,
work with international offshore regulators to share information on incidents, good practice and standards,
be an open, transparent, and learning organisation, and
deliver continuous improvement in the efficiency and effectiveness of our regulation of major hazards.

9 The Offshore Programme activities will help to ensure the adequate control of risks in the upstream petroleum industry. This is done by testing compliance with legislation and standards aimed at the industry’s major hazards, and where appropriate promoting improvements. These hazards are fire and explosion from unintended hydrocarbon release, loss of structural or maritime integrity, and marine and aviation collisions. Also the remote and demanding working environment increases the challenge to provide adequate evacuation, escape and rescue arrangements.

10 With respect to communications OSD will: -

communicate the MHSP strategy to its staff,
identify and engage relevant internal stakeholders, ensuring delivery of clear and consistent messages,
identify and develop lines of communication from the MHSP to Communications Directorate and internal stakeholders with external contracts, and
encourage all staff to identify, develop and transfer good practice internally
identify and engage relevant external stakeholders, including the public, other government departments and the workforce,
ensure delivery of clear and consistent messages to external stakeholders, based on analysis of their needs,
encourage the major hazard industries to recognise the benefits in sharing best practice, and
provide assurance to the public. OSD will contribute to work on determining the levels of assurance currently given to the public on major hazards and to understanding the depth and breadth of assurance that the public require.

2.3 Other Benefits

HID’s Vision

11 Progress in the work year will also be made in implementing HID’s vision. This is to improve the health and safety of people by being an independent, expert, effective and a fair regulator of the onshore oil and gas extractive industries and to be acknowledged as such by all our stakeholders, including ministers, employers, employees, the public and fellow regulators.

2.4 Measurement

12 Working in partnership with industry, the workforce and other agencies, OSD seeks continuous improvements in health and safety. This is reflected in a combination of targets agreed with Treasury and HSE’s sponsoring department the Department of Work and Pensions. There is currently one offshore specific Public Service Agreement (PSA) target and three conventional health and safety targets.

Offshore Specific PSA target

13 The PSA target is to achieve a 45% reduction in the number of major and significant hydrocarbon releases, against the 2001/02 baseline figure. This gives a target of 62 for 2007/08.

Conventional PSA Targets

14 Based on 2004/05 baselines the targets are:

the incidence rate of work-related fatal and major injuries: 3 per cent reduction by 2007/08
the incidence rate of work-related ill health: 6 per cent reduction by 2007/08
The number of days lost due to injuries and ill health: 9 per cent reduction by 2007/08.

Output Performance Measures (OPMs)

15 HID reports quarterly to Operational Policy and Support Division on four OPMs for operational productivity:

OPMA - the number and percentage of safety cases processed to published timescales and quality standards – target 100%
OPMB – the time spent on front-line intervention, expressed as a percentage of the planned time for this activity – target 100%
OPMC – the number and percentage of valid complaints investigated – target 90%
OPMD – the number and percentage of incidents classified as mandatory for investigation that were investigated – target 97%

Review and Evaluation

16 Regular reviews of the Programme, coupled with assessment of outcomes and interventions, will ensure that workstream activities and initiatives are monitored, assessed and where necessary modified for effective delivery of major hazard targets.

2.5 Critical Success Factors

17 These include:

A major hazard industry that is making progress towards meeting the targets it set itself for improving its health and safety performance;
An industry that builds effective partnerships;
An industry that drives forward self-improvement by all stakeholders and cascades the performance of the best to others, especially SMEs in its supply chains;
An HSE that is trusted by the industry and its workers as the facilitator for action, an advocate of sensible risk management, and a regulator that challenges those who fail to meet expectations;
An HSE that effectively communicates with the major hazard industry.

Approach

3.1 Proposed Approach

18 A key part of OSD’s work consists of assessment and validation of safety cases submitted by duty holders. Intervention plans are developed for each duty holder and installation; the plans include provision for the investigation of incidents and complaints as well as preventive inspections.

19 In 2007/08 OSD introduces a structured risk control framework for planning, recording and reporting back intervention findings on the adequacy of barriers to preventing major and occupational accidents. The use of the framework, coupled with traffic light performance indicators based on inspection findings, will enable not only individual installation and duty holder performances to be reviewed simply but will enable cross installation and cross company comparisons of performance.

20 The revised safety case regulations are changing the emphasis of how we use safety cases. There will be less desk-based review and more testing of the assertions in the case by direct contact with the duty holder, onshore and offshore.

21 The division will also be developing an intervention strategy to follow up safety case thorough reviews.

22 Much of the effort towards OSD’s goals has been directed via its two key inspection programmes, KP2 and KP3. KP2 was focused on what has been identified as the largest single contributor to fatal accidents, the management of hazardous deck operations, particularly lifting operations. It included a combination of structured inspections, mandatory incident investigations and working with industry organisations to improve standards The programme formally ended on 31 March 2007. The provisional statistics show targets have been met.

23 KP3, the installation integrity programme, targeted the management of the risk of failure of structure, plant, equipment and systems. It included prioritised inspections, increased investigation of loss of integrity incidents, and working with external stakeholders to identify the main issues and the necessary remedial actions. In 2007/08 KP3 moves to a new phase; we will reduce the number of inspections and concentrate our efforts on interrogating company internal audit systems to confirm whether the safety management systems are working effectively. UKOOA will continue to collate the Performance Indicators, and the workgroup (of which we are a member) will be reformed, under a new chairman, to take a more strategic overview. For more detail on the outcomes of the key programmes see the link in the Annex.

24 Following evaluation of OSD’s pilot programme (TP1) on occupational health, it has been decided to continue this approach as a long-term programme for the offshore inspection of occupational health. The aim of this programme will be to work with duty holders to raise awareness of health risks, secure compliance with regulations and to target the priority occupational health issues (MSD, noise/vibration, asbestos and hazardous substances). In addition, there will be an inspection project on the duty to manage asbestos, and work to review the offshore specific guidance on occupational health with a view to establishing future needs. New EU regulations on food and related matters came into force in 2006: OSD will be developing a formalised approach for carrying out offshore inspections and investigations of food and water hygiene.

25 The Diving Group within OSD covers at-work diving throughout the UK, not just that associated with the oil/gas industry. It has a separate Operational Plan, which targets intervention activity towards safety management systems, supervisor competence, slips, trips and falls, and health issues.

OSD Intervention Projects – 2007/2008

26 OSD’s two major intervention projects KP2 and KP3 focused on installation integrity and fatal and serious accidents associated with drilling and deck operations concluded in 2006/07. However work will continue to check that duty holders are compliant with their own management systems. In addition OSD is also concern about how effectively duty holders are addressing the critical challenges the offshore industry is currently facing. We have therefore initiated specific intervention projects in 2007 to test how effectively these issues are being managed. The project activity in 2007 will be: -

27 Effectiveness of audit arrangements to target risk control barriers: This will assess the effectiveness of duty holder internal monitoring/audit/review systems and related safety case compliance, by inspecting against outputs and review actions associated with those systems focusing on, in particular, (a) major accident initiation/escalation barriers and (b) deck and drill floor lifting operations.

28 Corrosion Inspection: The purpose is to reduce risks from corrosion on offshore installations by securing of improvements to duty holder management systems and the physical condition of offshore installations.

29 Management of Change Inspection: This will deliver an appropriate package of interventions to assess the effectiveness of individual duty holder’s systems for the management of change. The project will concentrate in the first instance on the management of small inter related changes and the impact on risk awareness and risk perception. This will look at management and awareness in changes to risk control barriers.

30 Contractor competence and duty holder relationships: This will deliver, across the UKCS, an appropriate package of OSD intervention and enforcement to ensure the existence of adequate offshore duty holder/contractor interface management systems for the provision of competent contractor staff and appropriate contracted services.

31 Verification Inspection: This will ensure duty holder compliance with regulatory requirements for verification schemes on offshore installations by targeting the relationship with independent competent persons and the effective close out remedial action and organisational learning arrangements for certification findings.

32 Performance indicators: Dialogue is continuing with industry to develop a number of performance indicators, focussed on improving the maintenance of installation structure and plant integrity, eliminating fatalities and reducing injuries arising from deck and lifting operations, and reducing the incidence of ill health. Indicators currently agreed are:

Numbers of major and significant hydrocarbon releases (PSA target).
Significant verification findings – Total number of open significant findings for each installation at month end (Findings are raised where the independent check on a safety critical element finds that the element concerned does not meet its performance standard).
Production losses caused by process interruptions arising from unplanned event.

33 Research: Delivery of Programme activities may require the commissioning of science projects. These projects are funded from annual allocations decided by HSE’s Science Strategy Committee. The research priorities for major hazards are identified in HSC’s science strategy – see Annex. They include work on safety management systems, process safety and human factors.

34 Step Change: HSE supports the offshore industry’s Step Change in Safety initiative through membership by the Head of Division of the Step Change Leadership Team. Step Change in Safety is aimed at sharing safety information and good practice, and improving the industry’s overall safety performance. Its target is for the UK to be the safest offshore sector in the world by 2010. OSD plays a part in this initiative, sharing in a commitment with industry associations and trade unions to work together to improve health and safety performance, awareness and behaviours. OSD personnel contribute to the development and promotion of Step Change initiatives, We have previoulsy had secondees on the Step Change support team and we participate in the Step Change Network Meetings.

35 Workforce involvement: OSD believes in the active involvement of the offshore workforce in health and safety. Changes in Safety Case Regulations will allow more time to be spent offshore validating safety cases, providing the opportunity to engage with personnel and explain HSE’s actions and priorities. The revised Safety Case Regulations now require specific information to be provided in each safety case summarising how the installation safety representatives were consulted about the revision, review or preparation of the safety case. This provides an opportunity to review this involvement and raise concerns at post assesssment interventions. OSD is also committed to responding promptly and diligently to all complaints. OSD convenes regular meetings with TU representatives to explain its plans and performance, and publishes ‘Tea Shack News’ twice a year to keep the workforce informed of OSD’s activities It is also hoped to organise a safety representative conference in 2007/08 with the support and co-operation of one or more of the Trades Unions.

36 Standards and good practice: OSD contributes to working groups and committees developing guidance and good practice, for the UK offshore industry and internationally. Examples are standards for the oil and natural gas industries being developed by ISO and SNAME (such as seismicity, floating offshore structures, fixed structures, jack-ups) and The Electrical Equipment of Ships produced by the IEE/BSI Joint Ships/Offshore Electrical Committee.
37 Liaison with other regulators: OSD meets regularly with other regulators to share good practice and discuss issues of common concern – see Section 5.2.

38 Business improvement: The Offshore Division Programme is subject to HID’s processes for effective information management, continuous improvement in business processes and sharing knowledge and good practice. These are based on:

auditing and benchmarking reviews,
business improvement and business risk management, and
data knowledge and information management.

Resources

4.1 Programme Staffing

39 OSD contribution to the MHSP and the PSA 2 targets is via the major hazardous installations programme. The resources to be allocated for 07/08 are, in staff years: Assessment 4.8, Inspection 25.35, Investigation 7.6, Enforcement 1.7 and Policy, Information and Advice 8.

4.2 Cost Recovery

40 The 07/08 indicative budget allocation for HID in respect of HID’s main cost recovery lines have been set at £12.1M, of which £8.14M is proposed to come from offshore. Actions are underway and will continue throughout 2007/08 to recruit/train additional specialist staff and upskill existing staff to maximise OSD’s ability to meet the indicative allocation for cost recovery.

4.3 Staff Issues

41 OSD will take its part in HID meeting its need to reduce staff during 2007/08. It will follow the agreed principles by:

seeking to ensure all our expenditure is focused on delivering our business needs and protect front line delivery staff
maintaining (and in some places enhance) Regulatory and Discipline Specialist input to front line delivery for example to recruit staff to OSD in Aberdeen
looking to work with staff to identify process efficiencies and work that might be better done differently or centrally or can be dropped or deferred;
brigading, to the extent that makes business sense, a number of common functions (e.g. strategy development, operational policy, intervention planning) that are carried out to a greater or lesser extent in each Division into single cross-Directorate teams.

Achievability

5.1 Risks

42 Measures have been put in place to minimise the risks under the control of HID’s management board. Those controlled by the Strategic Programme Director and by HSE are covered by measures taken under corporate business risk management.

43 The HID Operating Plan identifies the main business risks, which are handled by OSD’s Business Risk Management Process. Primary and secondary workstream business risks are grouped under four headings: External, Stakeholder, People & Culture and Systems & Process. Each workstream has identified their risks and countermeasures, following guidance issued by PEFD and HMB.

Key risks for the Programme are:

a reduced ability to recruit new staff with specialist expertise, thereby reducing experience profiles. Possible countermeasures include training from a lower competence baseline, developing structured training modules for key competences, and developing more experienced staff in coaching, mentoring and assessing skills to NVQ standards. This remains a significant risk,
the impact of new IT systems on inspector time and on the quality and availability of records and intelligence. Countermeasures include direct contact with system developers to increase their understanding to better resolve the practical problems. A mitigating measure is to sacrifice lower priority work, which itself creates a business risk. This risk is now receding.

Stakeholders

44 The Offshore Programme is a partnership operation, whereby HSE stimulates, supports and complements other stakeholders to achieve jointly the desired reductions in incidents and ill health. The continued commitment of stakeholders is essential to its effective implementation.

Examples of joint activities are:

Offshore Industry Advisory Committee (OIAC)
OIAC brings together a range of stakeholders from the offshore industry, including unions, employers, trade associations, representatives from MCA and DTI and a representative from verification bodies unions in the industry and provides a forum in which topical issues can be discussed and taken forward. OIAC aims to encourage participation of the representative organisations in protecting people offshore and is taking forward initiatives to raise standards of health and safety.
Pilot
A Government/Industry high-level forum chaired by DTI’s Energy Minister. PILOT is made up of senior government officials, including the Scottish Office and Scottish Executive Ministers, with HSE and leaders from the offshore oil and gas industry. PILOT aims to preserve the competitiveness of the UKCS and maximise jobs, investment and commercial opportunities. In 2002 health and safety became one of PILOT’S three priorities for the year and an additional target was added to it’s 2010 vision - to make the UKCS, the safest place to work in the worldwide oil and gas industry. PILOT is parent to ‘Step Change in Safety’. HSE is developing an effective partnership with PILOT and will play an active part in delivering PILOT’s vision without compromising its unique role as regulator and adviser.
Step Change in Safety
Step Change in Safety was launched in 1997. It aims to deliver a major improvement in the whole industry’s safety performance. Through cross-industry partnerships it is endeavoring to improve health and safety performance in the industry with the target of a 50% reduction in the fatal and major injury rate by 2010. The major trade associations, industry and the trade unions have signed up to working together and with HSE to achieve the Step Change targets. In 2002, Step Change responded to a challenge by HSE to significantly increase its impact. This led to levering into PILOT a core principle that health and safety are integral to the industrial value chain and good performance is critical to the sustainability of the UKCS. Following the adoption of safety goals into PILOT’s top priorities, HSE decided to join the Step Change leadership team.
North Sea Offshore Authorities Forum (NSOAF)
NSOAF is comprised of representatives from Denmark, the Faroe Islands, France, Germany, Ireland, the Netherlands, Norway, Sweden and the UK. It meets annually to exchange information and develop common positions and joint initiatives. NSOAF is working to reduce the difficulties due to differences in regulatory regimes and requirements, for example to make it easier to move rigs between North Sea countries, and to harmonise safety training standards.
International Regulators Forum (IRF)
IRF comprises eight states that produce offshore oil and gas; USA, Canada, Brazil, Netherlands, Norway, Australia, New Zealand and the UK. IRF shares knowledge and information of safety issues and global company performance. The group meets annually and corresponds by e-mail at other times. Current projects are:
- international performance indicators,
- recognition of outstanding performance,
- improving safety in lifting operations, and
- an international regulators conference.
European Union
In recent years most health and safety legislation has been introduced to implement European directives, mainly to promote minimum standards for health and safety of workers, but also to maintain the single market or protect the environment. There is now a body of EU health and safety law, the basis of which is the Framework Directive that established broad obligations for employers to avoid and reduce risks in the workplace. We will work with other member states to ensure standards are appropriate for the UK and offshore.
Bilaterals
In addition to multinational collaboration, we have regular bilaterals with major producing neighbours. We have effective links with the Norwegian Petroleum Safety Authority through the UK/Norwegian Special Working Group. The meetings allow an exchange of information and the development of common positions on cross-border issues. A new UK/Norway Treaty is planned to encourage closer links. Annual meetings are also held with the Danish Energy Authority and the Dutch State Supervision of Mines, to facilitate agreement on cross-border issues.

Annex – Further Information

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