Safety, Health and Environment Management for Corporate Success

1. Safety, Health and Environment Management for Corporate Success Why SH&E Management is Important

2. S, H & E Mgmt. for Corp. Success • Why is SH&E Mgmt. Important? • Examine Cases • Poor SH&E Management • Excellent SH&E Management • Contrasts • What is the Value to the Business? • SH&E Mgmt. is Vital to Success • Senior Manager/Executive Actions • “Doing the Right Thing”

3. S, H & E Mgmt. for Corp. Success • Why is SH&E Management Important? • Individuals demand health and safety • Unwilling to work if it presents unacceptable risk • Customers demand health and safety • Unwilling to pay for the cost of accidents, injuries and damages • Society demands healthy, safe environmentally friendly services & products • Unwilling to acquire products manufactured in a way that exploits or harms people / environment

4. Case Study - ValuJet • US Based discount Airline • Headquartered in Atlanta • Founded in late 1992 • Grown rapidly and had 3,500 employees as of May 1996 • Flying 51 planes to 31 cities in the United States • Plans for further growth later in the year (1996)

5. Case Study Valujet ValuJet plane crashes in Everglades May 11, 1996Web posted at: 4:00 p.m. EDT MIAMI, Florida (CNN) -- A ValuJet DC-9 carrying 109 people from Miami to Atlanta crashed shortly after takeoff in the Florida Everglades Saturday afternoon. Rescue teams were still searching for the crash site. There was no immediate confirmation of casualties, but Lauren Gail, a spokesperson for Miami International Airport said, "We don't believe there are any survivors." The FAA confirmed the plane was carrying 104 passengers and 5 crew members. Aerial pictures showed what appeared to be debris strewn over a marshy region of the Everglades. The pictures showed no signs of a fuselage or larger aircraft pieces. Flight 592 was about 30 miles north of Miami International Airport when it experienced a "problem in the cockpit," according to FAA spokesman Anthony Willett.

6. Case Study - ValuJet News Briefs July 3, 1996Web posted at: 10:15 p.m. EDT ValuJet files recovery plan with FAA WASHINGTON (CNN) -- ValuJet submitted a plan to the FAA in Atlanta on Wednesday, describing how the low-fare carrier will resume flights with 15 planes. No details were available. ValuJet had more than 50 DC-9s in service before one crashed May 11 in the Florida Everglades, killing all 110 people on board. The airline shut down after a federal inspection found "several serious deficiencies" in its operations. Under a consent decree signed by ValuJet, the airline will pay the Federal Aviation Administration $2 million to cover the cost of inspections and enforcement of the order. The limit of 15 aircraft was a condition of the decree.

7. Case Study - ValuJet ValuJet struggles to balance safety, bottom-line September 29, 1996Web posted at: 9:20 p.m. EDT From CNN Correspondent John Zarrella MIAMI (CNN) -- Attorneys for the union representing ValuJet flight attendants have gone to court in an effort to keep the discount airline out of the skies. "The airline wasn't safe in May and we don't believe it is safe today unless the two top officers of the company are removed," said Association of Flight Attendants General Counsel David Borer. ValuJet officials said the company is altogether different since the May 11 crash in the Florida Everglades. The Federal Aviation Administration has assigned seven inspectors to oversee the airline's nine-plane startup. There were only three inspectors when ValuJet was at full strength.

8. Case Study – Firestone & Explorer • Ford Explorer a solid performing vehicle • Ford engineers provided specifications • Firestone Wilderness AT tires were manufactured to meet the specifications • Steel belted tires are highly engineered products.

9. Case Study – Firestone & Explorer • Ford Explorer’s equipped with Firestone Wilderness AT tires were involved in 79 out of 88 fatal rollover accidents • Treads separating from the steel belts of the tires caused these events • Tire pressure recommended by Ford was 26 psi • Firestone recommended 30 psi • Ford specifications required tires to meet the minimum heat resistance rating (‘C’ rating). • The highest level of tread separation came from tires manufactured at the Firestone Decatur facility. Workers at the Decatur plant have subsequently testified that the focus was on meeting production quotas.

10. Case Studies – Poor Performance • Could these events have been prevented? • What contributed to these fatal accidents? • Did Senior Managers actions contribute to these events? • Was safety valued?

11. Case Study – Manufacturer • Established Corporate Principles • Employees Worldwide – 264,000 • Management system that is recognized world wide for effectiveness • Policy “Safety is management itself” • Consolidated Environment Mgmt. for over 600 subsidiaries / facilities • Goal: “Zero Accidents”, “Zero Emissions”

12. Case Study - Toyota

13. Case Study - Toyota • Occupational Health & Safety • Objectives, targets and measures • Extensive training • Inherent safety of equipment based on risk assessment • Proactive prevention • 6S production • Total preventative maintenance Programmes to address identified risks and objectives

14. Case Study - Toyota • Environmental Management System

15. Case Study - Toyota • Specific environmental objectives and targets • Measured and reported yearly results

16. Case Study - Toyota • Leadership Team recognizes that safety and environmental impact of the product is significant!

17. Case Study - Toyota • Leadership Team recognizes that safety and environmental impact of the product is significant!

18. Case Study - Toyota • The focus on safety and environmental performance results in profitability!

19. Case Study – Noble Corporation • Noble Corporation • 84 years in operation • 60 units world wide • 5300 employees • R.W. Campbell award for SH&E mgmt. excellence • 12 years of improving safety performance • Selected for the Dow Jones Sustainability Index • Highest ever operating revenues in 2004

20. Case Study – Noble Corporation • R.W. Campbell Award Winner 2004 for SH&E Excellence • Senior Management Commitment to HSEQ • Weekly world-wide conference calls & quarterly safety meetings • CEO Chaired SH&E Steering Committee • SH&E Systems Investment – integrated into capital budgets • ISO 9001 & 14001 Certification • International Safety Management Code • Lean Six Sigma • Rig Standardization Team • Organizational SH&E - Focus • Short Term Incentive Plan – Safety results accounting for 50% • “Right to Refuse Work” Policy • JSAs (Job Safety Analyses – hazard identification & control) • STOP Observations • Competency Assurance Program • SH&E Performance Reporting • Leading (NDOR, JSA, Observations, Audits) • Lagging (LTI Rate, Emissions) Indicators

21. Mid East jackups 4 Units Mid East jackups Semi upgrades $ Millions 3,600 3.0 Joint Ventures 3,000 2.5 EVA’s 2,400 2.0 Neddrill/ Other Int’l 1,800 1.5 Chiles Western 1,200 1.0 Transworld GE/Bawden 600 0.5 0 0.0 Land/Barge Rigs Sale Mat Rigs Sale (600) (0.5) '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Note: Replacement value of fleet was $6.3 billion per Jefferies’ November/December 2003 report Noble Corp. - Safe and Profitable

22. Excellent Performance Leadership Team identifies SH&E as a business value / principle Vision / Goal for SH&E Performance SH&E risks are identified, assessed & minimized SH&E objectives, targets, measures SH&E programmes & organization to manage risks Clear mgmt. responsibility & accountability SH&E mgmt. system review by Leadership Team Poor Performance Lack of Leadership Team direction for SH&E an element or factor Lack of Vision / Goal for SH&E SH&E risks aren’t effectively identified SH&E objectives poorly defined / not challenging SH&E programmes don’t address risks Mgmt. responsibility & accountability is unclear Key SH&E mgmt. system elements don’t exist Case Study - Contrasts

23. S, H & E Mgmt. for Corp. Success • Value to Business • Vital to entry & operation within the marketplace • Improved productivity • Loss control, SH&E Mgmt. closely related to quality, business control & operational reliability • Improved reputation • Safe, environmentally friendly • Creates mindset & value system to achieve success • Differentiated product or service • Competitive edge

24. S, H & E Mgmt. for Corp. Success • Senior Manager/Executive Actions • Create your Vision for SH&E and document it in a Business Policy / Principle statement. • Assess your management system against established and recognized standards such as CSA/ISO 14001 and OHSAS 18001. • Establish yearly objectives, targets and measures to address SH&E gaps. • Put appropriately resourced programs and people into place to achieve the objectives. • Review the management system’s effectiveness at least annually • Benchmark against leading organizations!

25. S, H & E Mgmt. for Corp. Success • Personal Actions • Communicate your Vision and set the tone for SH&E, set standards and abide by them. • Demonstrate exemplary safety behaviour and demand it of your people. • Talk to the workforce about company SH&E performance. State company and industry-wide goals. • Intervene and obtain assurance that work is proceeding in accordance with safe work procedures and standards. Encourage others (supervisors, managers) to intervene. • Undertake to attend specified appropriate safety training. • Be involved in the SH&E management system. Intervene to assess how it works (e.g. be part of an audit or incident investigation team). • Initiate a cultural change (e.g. all meetings start by a discussion of SH&E). • Challenge the organization.

26. S, H & E Mgmt. for Corp. Success SH&E Management is “Doing the Right Thing” For People and Corporate Success