Corporate Responsibility & HSE Management System: PDO Case Study

1. Corporate Responsibility & HSE Management System: PDO Case Study Presented by: ’Dapo Oguntoyinbo Corporate HSE Manager Petroleum Development Oman Managing Safety in the Workplace Dubai 08/09DEC03

2. Contents • Overview of Corporate Responsibility • The Case for Change • The Incident Triangle/Iceberg • Historical Trend in HSE • Using HSE to improve Corporate Responsibility • HSE Management System • PDO HSE Performance • Target Zero: Myth or Reality ? • Key Steps for improvement Managing Safety in the Workplace Dubai 08/09DEC03

3. Corporate Responsibility • Become a good Corporate Citizen • Protect Health and Safety of people, and the Environment • Reduce risks to ALARP • Accountability: risks and benefits of what we do • Respect for all people • Legislation and standards: meeting or exceeding • Obtain public confidence: operate by public consent • External Reporting, with third-party verification • Enhance Corporate Reputation • Continuous improvement Managing Safety in the Workplace Dubai 08/09DEC03

4. Geco Seismic Vessel Managing Safety in the Workplace Dubai 08/09DEC03

5. Bhopal Union Carbide Plant Accident 1984 Over 2,500 deaths, 350,000 injured, premature deaths, etc. loss in stock market value exceeding $900 million, Union Carbide Inc. paid over $425 million to settle litigations, etc. Managing Safety in the Workplace Dubai 08/09DEC03

6. Piper Alpha 1988: Over 167 people dead, estimated loss over $3 Billion

7. Petrobras P-36 Sinking 2001 • Brazil, March 16, 2001 - The world's biggest offshore oil rig, owned by Brazil's state oil giant, Petrobras, sank into the ocean spilling crude oil, a day after an explosion that killed 10 people. happens only to others? Managing Safety in the Workplace Dubai 08/09DEC03

8. Zauliyah-16 Blow Out (August 2001) Blow-out, leading to loss of Well Pulling Hoist, Well, Facilities, Environmental damage, but luckily no fatality Managing Safety in the Workplace Dubai 08/09DEC03

9. Cost of Accidents at Work Some Major Accidents 1979 - THREE MILE ISLAND NUCLEAR PLANT - US $ 1.3 billion 1984 – BHOPAL UNION CARBIDE PLANT - US $ 1.4 billion 1986 - CHERNOBYL NUCLEAR PLANT - US $ 5.5 billion 1988 - PIPER ALPHA OIL PLATFORM - US $ 3.0 billion 1989 - EXXON VALDEZ (clean-up costs only) - US $ 2.5 billion 1998 - Esso Longford gas plant explosion - US $ 4.8 billion Good HSE is Good Business Managing Safety in the Workplace Dubai 08/09DEC03

10. High Trust Low 1980 2000 1940 1960 Time Trust Me Historical Trend of Public Trust Tell Me Show Me Involve Me TUT 1.5

11. The Incident Triangle One fatality---------------------- 100 Lost Time Incidents--- 1000 Non LTI’s----------- 10,000 Near Misses--- 100,000 Unsafe Acts- Over 96% of Incidents are caused by People Managing Safety in the Workplace Dubai 08/09DEC03

12. The Causes of Injuries Fatalities Lost Time Injuries Medical Treatment First-aid Cases • Unsafe acts & Unsafe conditions • 96% / 4 % Managing Safety in the Workplace Dubai 08/09DEC03

13. Historical Trend in HSE Injuries Engineering Systems: Hardware issues to engineer out hazards Management Systems: develop procedures, etc. to control hazards Focus on People: empowerment and conviction to work SAFELY Time Managing Safety in the Workplace Dubai 08/09DEC03

14. PDO & Contractors HSE Performance 1986 – 2002 LTIF: incident per million hours worked Managing Safety in the Workplace Dubai 08/09DEC03

15. Using HSE to enhance Corporate Responsibility Managing Safety in the Workplace Dubai 08/09DEC03

16. Improving Corporate Responsibility via HSE • Justification for managing HSE effectively in the workplace: • Humanitarian • Legal • Financial • The cost of poor HSE performance: • Human life • Loss of loved ones, family suffering • Personal injury & suffering, disabilities – partial or permanent • Loss of stable income for families • Equipment damage, deferred production avoidable loss • Significant financial loss (e.g. Time, Facility, productivity, etc.) • Reputation • An organisation with a good HSE Management System is usually a well run organisation Managing Safety in the Workplace Dubai 08/09DEC03

17. HSE Management System Managing Safety in the Workplace Dubai 08/09DEC03

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19. HSE Management System Objectives: • Manage hazards & effects to H,S & E in a structured way • Set performance standards for managing HSE • Continuous improvement via monitoring, reviews and audits Impact of HSE-MS on Corporate Responsibility: • Prevent injury to people, safeguard health and environment • Reputation Implementing HSE-MS: • Improve workforce understanding of HSE-MS • Link Hazard Management to Activity • Understand “What it means to Me” Managing Safety in the Workplace Dubai 08/09DEC03

20. PDO HSE Management System Leadership and Commitment Plan Policy and Strategic Objectives Organisation, Responsibilities Standards, Procedures and Document Control Do Hazards and Effects Management Process Corrective Action Planning Check Monitoring Implementation Audit Act Management Review Managing Safety in the Workplace Dubai 08/09DEC03

21. PDO HSE Management System Leadership and Commitment Informed Involvement Review Set Targets Benchmark Assign Responsibilities Plan Policy and Strategic Objectives Organisation, Responsibilities Standards, Procedures and Document Control Document Resources Train people Execute Do Hazards and Effects Management Process Corrective Measure performance Audit Obtain feedback Evaluate employees perf. Action Planning Check Monitoring Implementation Communicate performance Follow-up Audit Findings Reward/correct employees Repeat PLAN Audit Act Management Review Managing Safety in the Workplace Dubai 08/09DEC03

22. PDO HSE-MS Managing Safety in the Workplace Dubai 08/09DEC03

23. Barriers or Controls Hazard/ Risk WORK Accident Violation + Error = HSE-MS is about People DISASTER Managing Safety in the Workplace Dubai 08/09DEC03

24. Fatal Electrocution • What happened?: • Electric shock whilst repairing Microwave Oven • Result: • One dead • Learning: • Non-compliance (warning signs) • Competency/Standards Managing Safety in the Workplace Dubai 08/09DEC03

25. Challenges of Compliance (Hearts & Minds) Managing Safety in the Workplace Dubai 08/09DEC03

26. People: Focus on Hearts & Minds Managing Safety in the Workplace Dubai 08/09DEC03

27. HSE CULTURE LADDER Managing Safety in the Workplace Dubai 08/09DEC03

28. Understanding your culture ü Implementing HSE MS ü Managing Rule Breaking ü Risk Assessment Matrix ü Improving Supervision Making Change Last Seeing – as others see you Safety Climate / Workforce involvement Behaving Safely Achieving situation awareness Hearts & Minds Tools Set of high quality tools available: Managing Safety in the Workplace Dubai 08/09DEC03

29. PDO HSE Performance Managing Safety in the Workplace Dubai 08/09DEC03

30. PDO & Contractors drive 120 Million Km per year average; i.e. travel round the world 3,000 times a year (8 times round the world every day !!!) Managing Safety in the Workplace Dubai 08/09DEC03

31. PDO &Contractors: Road Safety Performance Road Traffic Accidents per Million Km driven Reduction: DDC Managing Safety in the Workplace Dubai 08/09DEC03

32. Road Safety Challenges in PDO Key Road Safety Performance Figures YTD 2000 2001 2002 2003 Million kms driven 118 121 132 92 RTAs 158 159 111 70 RTAF 1.3 1.3 0.8 0.7 Rollovers 43 33 22 13 Rollover Freq.. 0.36 0.27 0.16 0.13 RTA LTIs 21 15 5 3 Managing Safety in the Workplace Dubai 08/09DEC03

33. Target Zero in PDO LTIF versus Fatality frequency over the years LTI frequency (LTI/million hrs) 2003-Target Zero Fatality frequency (Fatalities per million hrs) Managing Safety in the Workplace Dubai 08/09DEC03

34. Target Zero: Myth or Reality ? Managing Safety in the Workplace Dubai 08/09DEC03

35. fuel tank ignited and plane crashed 1 of those had punctured the fuel tank 4 tyres had burst on runways 84 ??? don’t know how many near misses or unsafe acts hadhappened ??? Let’s look at the STATISTICS for Concord before the recent crash that KILLED more than 100 People The ICEBERG ... disaster / fatality 1 major accident - injuries involved minor accident (towed away) near misses unsafe act Managing Safety in the Workplace Dubai 08/09DEC03

36. No Injury One Fatality Improved HSE Culture (Proactive): No LTI Club B Strong Site HSE Awareness and Supervision via ESS, WS, STOP, etc. 100 LTIs Site Management HSE Leadership, e.g. via Support for ESS, HSE Advisers Networking, etc. 1,000 Non-LTIs A 10,000 Near Misses Positive HSE Climate created by top Management (HSE is Priority No. 1) 100,000 Unsafe Acts Target-Zero: No Injuries The Incident Triangle HSE Management Triangle LEGEND: A = Levels covered by HSE Leadership, e.g. Joint Mgt HSE Insp., Site Management Support B = Levels covered by Workforce Engagement (ESS, Working Safely Workshops, Safety Circles/Forum) Managing Safety in the Workplace Dubai 08/09DEC03

37. Feedback to CEOs Managing Safety in the Workplace Dubai 08/09DEC03

38. Feedback to CEOs Managing Safety in the Workplace Dubai 08/09DEC03

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41. How can we become Catalysts for Improvement of HSE Performance ? How can we contribute towards achieving Target ZERO ? Managing Safety in the Workplace Dubai 08/09DEC03

42. Key Steps for improving Corporate Responsibility • Develop and Implement HSE Management System • Demonstrate Leadership & Commitment • Effective Workforce Engagement • Evaluate HSE Culture of the organisation • Convince and Empower the workforce to work SAFELY • Recognise good performance Managing Safety in the Workplace Dubai 08/09DEC03

43. He who does not learn from the mistake of others is bound to repeat them !!! A SAFE Business is a Good Business Managing Safety in the Workplace Dubai 08/09DEC03