Contractor Health & Safety Forum - Strategies for Improved Safety Performance

1. Contractor Health & Safety Forum Paul DeanProject Engineering Manager/NRA Deputy Delivery Manager August 05, 2008 Brownfield Projects

2. CONTRACTOR HEALTH & SAFETY FORUM | PROJECTS DIVISION • Objective • ‘Our Performance has flat lined… What do we do next?’ • To come up with a Strategy on how we as a Group can make an impact on the next step in Safety Performance.

3. CONTRACTOR HEALTH & SAFETY FORUM | PROJECTS DIVISIONAGENDA • 08.30 Arrival | Parmelia Hilton - Karri Room | Tea and Coffee • 09.00 Introductions, Safety Briefing & Objective Sponsor : Ian Wilkinson 10 mins • 09.10 Overview of Woodside NWS Business Objectives Eve Howell /Roy Thompson 15 mins • 09.25 HSE Highlights, Lowlights, Trends & Lessons Learnt Aidan Hayes • Henk Feyen 35 mins • 10.00 Legal | Sparke Helmore Greg McCann30 mins • 10.30 Coffee Break | Morning Tea 15 mins • 10.45 Case Study‘Major Malfunction’ – Challenger Incident Facilitator:30 mins • 11.15 Table Exercise – Key Learnings from Case Study Paul Dean30 mins • 11.45 Table Feedback on Key Learnings 1 hour • 12.45 LUNCH 45 mins • 13.30 DVD | Gas Explosion 5 mins • 13.35 Table Exercise –What do we need to do (collectively) to reduce Facilitator: our risk exposure and meet our HSE objectives? Paul Dean 25 mins • 14.00 Rank and agree on way forward (Top 5 options) 30 mins • 14.50 Coffee Break | Afternoon Tea 10 mins • 15.00 Feedback Form Dale Gration 5 mins • 15.05 Just a Number Helen Fitzroy 45 mins • 15.50 AOB | Next Forum – Closure Dale Gration 10 mins • 16.00 Drinks & Nibbles

4. Ian Wilkinson TW ISC Director and Forum Sponsor

6. TRCF Jan 05 thru June 07

7. Key Messages • Started between a small group and wanted to address what can we do better to improve the current situation. Overall worsening performance in the organisation. • Cover some givens – we all want to improve safety performance. • Secondly, we face similar circumstances; shortage of labour, lack of training and experience, tight schedules and a client common to all. Our safety performance affects each other. We must work to address this together. • Thirdly from TW perspective, the fact is that within WA, we do not match the safety performance of our global peers. • Not necessary to be competitive. Good safety performance is good for all. Protect our people, our client. Help each other to perform better. • Ironic – sell together to improve safety performance. Issue around flat-lined safety performance have to do better by working together. Concrete actions to carry forward. Once session won’t improve but when walk away and action after this session.

8. Eve Howell Executive Vice President NWS

9. Roy Thompson Senior Vice President Oil and Gas Projects

10. Henk Feyen HSER Manager Project Development

11. Greg McCann Sparke Helmore Lawyers

12. Contractor Health & Safety ForumTuesday 5 August 2008Legal LessonsPresented by Greg McCann

13. Safety Laws • Incident at your Workplace • How to Demonstrate Safety is Integrated in your Business • Your Workplace and the Courtroom

14. Potential Impacts Civil Claims – by the family Fatality – Coronial investigation, findings, recommendations Workers’ Compensation Investor relations Tender implications Critical incident impacts • Commercial Reputation and Commercial Relationships • Community reaction • Licences are jeopardised • Disciplinary action – industrial issues • Criminal investigation and / or prosecution Tip: The impacts can be immediate and long lasting

15. The Petroleum (submerged Lands) Act 1967Occupational Health and Safety • Strict Liability • Concurrent Liabilities • Criminal Onus • System of Work • Cater for the careless, inadvertent, hasty or disobedient employee

16. Operators Obligations: • An operator must take all reasonably practicable steps to ensure that the facility is safe and without risk to “any person” and all work or other activities carried out on the facility is safe and without risk. - Contractors, eg. • Labour hire • Service suppliers • Electrician • - Third parties, eg. • Sales representatives • Family members, children, friends Penalty – 1000 penalty units Inspector Pompili v Central Sydney Area Health Service

17. Liability of Director, Servant or Agent • Where a body corporate is guilty of an offence, a director, manager or servant or agent will be guilty of that offence: • Defence: • Took reasonable precautions and exercised due diligence to avoid the conduct • Maximum Penalty • 1000 penalty units (=$110,000.00) • Case Law • Morrison v Perilya Broken Hill Ltd • Company Director

18. NOPSA Prosecution • Coogee Resources • Between 2 May 2006 and 11 May 2006 • Breach of Petroleum (Submerged Lands) Act The registered operator of “Jabiru Venture” in Timor Sea failed to take reasonably practicable steps to ensure facility was safe and without risk to health.

19. NOPSA Prosecution (cont) An operator who had only recently commenced work on the platform conducted work outside of the hand railed area, tripped and fell 4.7metres into sludge suffering serious injuries. New JSA conducted identified the potential hazard of falling from heights and inadequate lighting. • Maximum penalty $550,000.00 • Penalty imposed $180,000.00

20. How do you demonstrate safety • is a totally integrated • component of your business

21. Serious Incident Management Procedure • Initial response • Legal Professional Privilege • Your Investigation • Media • Safety alerts • NOPSA Investigation • Documents (6 months imprisonment) • Due Diligence

22. Your Workplace and the Courtroom

23. Conclusion • YOUR SAFETY MANAGEMENT SYSTEM IS YOUR BEST DEFENCE • Bulletins for changes to Safety and Environment Legislation and • Recent Court Decisions.

24. Thank you www.sparke.com.au

25. Coffee Break

26. Challenger Disaster Presented by Paul Dean

27. Challenger Disaster • Not an accident • Larry Mulloy – NASA Manager • Heartbreak • My Fault • Presidential enquiry • Known low temperatures • Concerns by Staff and contractors • Outside our experience base • Alan Macdonald – Thikol • Sent a note not to launch below 53ºF - actual was 29ºF • Flaws long known about sealing of rocket motors • Previous mission delayed several times • This mission delayed several times • Mounting pressure from the media • Teacher on board, giving a lesson from space…on the weekend to empty classroom if delayed! • Previous flight at low temperature, problems with booster rockets • Morton Thikol (Rocket Contractor – Boosters) • First launch SRB was flexing, O Rings were working beyond design • Defined as acceptable risks by NASA

28. Challenger Disaster • 25ºF was below experience base • Never been tried • Thikol presentation needed • Recommended not to launch by Thikol • 1985 letter written about O’Ring erosion – internal, not shown to NASA • Thikol prepared a no flight presentation • Late presentation • NASA and contractor working after-hours • Implications for Thikol managers • Contract with regards to NASA was up for renewal • Meeting at NASA, Florida – telecom between NASA and Thikol • Recommendation not to launch (Thikol Engineers) • Erosion of O’Ring due to cold (temperature and loss of seal will be catastrophic • Too dangerous to launch • No simulation done for these conditions • NASA says conclusion “does not hang up” • What evidence do you have? • Has been accepted in all previous flights (blow by)

29. Challenger Disaster • Vice President of Thikol • “Not to launch” • Engineer has to rely on data – NASA says “no data, on the contrary performs better at low temperatures”?? • NASA manager • Is it logical? • George Harding – (Senior Engineer at NASA) • Shocked by Thikol’s presentation • Although won’t agree to launch against contractors recommendation • Preparations for launch continued • Thikol management now questioning risk • Engineer cannot prove it will fail but expects low temperature will make it worse • Photo’s show low temperature is a problem? • Thikol Management says data not conclusive • “Guess its alright to launch” • Engineer – “I was powerless” • Thikol– recommends launch as conditions will not be different than previous launches • Result • Cold froze the O’Rings coupled with severe cross winds caused seal failures • Not an accident!! It was foreseen • “Just happed to be involved in an accident” NASA Chief

30. Case Study – Table Exercises

31. Case Study – ‘Major Malfunction’ • Team/Table Exercise • Review the video and consider • Major contributing factors • Influencing aspects, people, situations • Internal / External pressures • Could we have a similar incident happen in our business • Discuss the Incident and determine key findings • Discuss and agree Root Causes • Determine key learnings • Table Feedback – Nominate a Spokesperson • What did we learn from the incident? • What would we do to prevent a similar occurrence?

32. Table exercise

33. Key findings

34. Key findings

35. Lunch Break

36. DVD Gas Explosion

37. Table Exercise What do we need to do to reduce our risk exposure and meet our HSE objectives?

38. Table Exercise – Meeting our HSE objectives • Objective • ‘Our Performance has Flat Lined…….What do we do next?’ • What do WE need to do to deliver a step change? • Consider what we have covered today: • Safety culture, management focus, denial, operational pressures • The implications of maintaining our current performance • Our current Safety trends – increasing risk, increasing incidents? • Our business objectives • The current business environment • The Challenger and Veranus incidents

39. Table Exercise – Meeting our HSE objectives • In your teams: • Consider what are the key problems, issues & barriers • What would be the “ideal scenario”, ie. no constraints • Given the ideal scenario how will we get there? What options do we have? • Appoint spokesperson and present findings. • Then… • Collectively rank our options • Each table to spend 5 minutes deciding on the top 5 options • Spokesperson to mark up master options sheet (one tick for each item) • Zelda to collate the “Top 5 Options list”

40. How will we get there? • National framework for supervisor training • Develop rapid lessons learnt process • Lesson learnt from peer groups or wider industry • Consistent Golden Safety rules. • More regular engagement between contractors • Attitude – Assessments, training, monitoring and supporting. Some form of blacklist. • Common training scheme / Competency. Log book. • Substantial inductions. • Same safety tool. • Commitment / alignment – all CEO’s • Engage unions and government. • Share pool of critical resources. (example crane drivers) • Rotate safety champion. • Draw up on execution plan. • Mentoring. • Employee career plan. Defined R&D • Contract management more hands on.

41. How will we get there? • Reinforce HSE messages by making it personal • Run inductions by people with work / site experience • Pre-mob planning - More time for inductions • Try and increase number of experienced supervisor. Increase ratio of supervisors to inexperienced people. • Procedures must be robust. • Greater numbers of HSE advisors / coaches on site. • More resources required for lessons learned and feedback on that. • Well motivated team • Contractor / client interface (must listen) • Implement learnings • Aligned behavioural safety training (Woodside) • Common process risk • Realistic schedules with HSE float • Simple, common leading and lagging indicators across all work groups • Common PTW across oil and gas

42. How will we get there? • Improved leadership and supervisor education • Senior supervisors at plant • Achievable and sustainable safety goals • High standard mature safety management culture • Align all contractors with Golden safety rules and safety training • Structured ASA’s compliance with Golden Safety Rules • Only use qualified contractors • Ongoing HSE Forum

43. Table Exercise – Meeting our HSE objectives • External assignment • From the “Top 5 Options” each company to: • Work up your own strategies to address the Top 5. • Feedback at the next forum. • Did it work for you? • What was your experience? • Next forum – where to from here?

44. Feedback Form Dale Gration

45. Helen Fitzroy – Just a Number

46. AOB - Closing Dale Gration

47. Closing • James Reason: “Safety management systems are brought to life an appropriate organisational culture”. • Edgar Schein: • Culture – ‘it’s the way things are done around here”  Aidan Hayes / Henk Feyen – improve the culture. • Leaders create and change cultures, managers and administrators live within them. • Woodside wants to be a leader – Henk Feyen.

48. Closing • How do leaders do this? • Leaders create cultures by what they systematically pay attention to: • Greg McCann – what have you done for safety and can you demonstrate what you have done! • It’s what they: • Notice and comment on; • Measure and report on; • Control – Risk management / Change management • Reward / Recognise; and • In other ways what they systematically deal with (workplace and courtroom) “The conversations” – Greg McCann “What have you done previously?”

49. Closing • The point Schein makes is that organisational cultures may be detrimental to safety not because leaders have chosen to sacrifice safety to chase production but because they have not focussed their attention on safety – Criminal conviction.

50. Please join us for Drinks and Nibblies at the Globe Restaurant