Beyond Compliance: Strengthening the Safety Culture of the Offshore Oil and Gas Industry (2016)

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Strengthening the Safety Culture of the Offshore Oil and Gas Industry 17 gas industry institute would need to be entirely free from other interests and agendas and separate from API. The institute would also need to secure an industry-wide commitment to rigorous auditing and continuous improvement. In effect, all companies operating on the Outer Continental Shelf would participate in the safety institute. ReCommendaTion: The u.s. offshore industry should implement the national Commission’s recommendation for an independent organiza- tion whose sole focus would be safety and protection against pollution, with no advocacy role. Cos, although a strong, positive step in this direc- tion, is nonetheless organized within api and therefore not independent of that organization’s industry-advocacy role. moreover, the current cost of membership in Cos limits participation. membership in a single indepen- dent safety organization should be a key element of the fitness-to-operate criteria for all organizations, including operators, contractors, and subcon- tractors, working in the offshore industry. In addition, the regulatory agencies should support the requirement for participation in the single industry-wide safety organization. This would be one way for this independent organization to expand its finan- cial base and engage the entire offshore industry. The details of who would make membership in the single safety organization mandatory and how that might be accomplished would need to be worked out. For example, would a regulator establish this requirement, or would industry be ac- countable for making membership a condition for participating in offshore work? Would an operator make membership a requirement for its contractors? overcoming the Challenges to Change An organization’s primary goals (e.g., production, profit) may compete with or be perceived as competing with safety. Produc- tion is seen as an acute problem niColas Russell/geTTy

18 Beyond ComplianCe that needs to be addressed immediately. On the other hand, safety is seen as a chronic concern, and it is easy for complacency to set in and resources to be diverted to more pressing matters. Moreover, safety is often encour- aged by “outsiders” (e.g., regulators, citizens’ groups, news media) or safety specialists who may be seen as interfering with (and not understanding) the legitimate service and production work of the organization. In practi- cal terms, organizations often wrestle with the inevitable (at least in the short term) tension between safety and production goals. A strong safety culture, of necessity, accentuates technological and economic feasibility while promoting continuous improvement. The culture change process is more like a journey than a project: even highly successful and respected organizations can behave in ways that bring the strength of their safety culture into question. In a fragmented, competitive, heterogeneous, and ever-changing offshore oil and gas industry, supported by multiple regulators and industry associations, this journey will not be short or straightforward, but rather full of challenging twists and turns. Any change has intended and unintended consequences Bsee

Strengthening the Safety Culture of the Offshore Oil and Gas Industry 19 and reverberations, some of which reinforce the desired change, but some of which interfere with the change or raise new challenges. Thus the change process is iterative, uneven, and not fully predict- able. The primary challenges to implementing change in the offshore industry’s safety culture are discussed below, along with approaches for overcoming them. Each Company Needs to Determine How to Strengthen Its Safety Culture Each industry segment and each company needs to consider what safety culture means; what behaviors are critical for it to sustain such a culture; and how it should implement an effective assessment system, which takes more thought and resources than simply adopting standard tools (see the discussion of assessment in the final sec- tion of this report). Change tactics need to be appropriate to the context. The same change plan may work in one setting (e.g., a large integrated operator) and not another (e.g., a small indepen- dent operator). Overcoming the Challenge It is evident that many companies in the offshore industry are well under way on their safety culture journey and can serve as instruc- tive examples to others. The nuclear power and airline industries also provide helpful role models and have exhibited a notable willingness to share information within their own industry as well as with others. In the offshore industry, each company need not in- vent its own safety culture policies, practices, and assessment tools, but each will have to decide how to apply the knowledge and tools derived from the experiences of other companies in addressing its own specific needs and goals. The offshore industry can continue to develop resources and guidance by sharing information through Bsee noaa

20 Beyond ComplianCe existing collective institutions, such as trade associations, working groups, the Society of Petroleum Engineers, and COS. Leadership Commitment to Building and Sustaining Safety Culture Varies Among Organizations Senior leaders and owners of companies in the offshore industry vary in their understanding of, commitment to, and engagement with develop- ing and sustaining a strong safety culture. Although pockets of excellence exist, there remain the leadership challenges of setting strategy, deploying initiatives, and meeting business goals while modeling safety as a value. Leaders create an environment in which safety culture (and safety) erodes when they reward productivity but do not consistently recognize safety performance, or send intentional or unintentional messages that safety is less important than productivity, too expensive, or something pursued merely to comply with regulations. Leadership transitions can derail an organization’s safety culture if new leaders are not prepared to take full ownership of the culture, even when a good system is in place. Overcoming the Challenge As discussed earlier, successful transition to an effective safety culture requires a compelling vision and a practical plan for moving forward that will motivate stakeholders. Leaders can create and communicate a vi- sion that describes safety as a fundamental value of the organization, not just a transient priority. Priorities change, but values endure and become embedded in the culture. If leaders are to be committed to maintaining an effective safety culture, they must first believe that the tangible and intangible benefits of doing so far outweigh the costs, as illustrated by the case examples of the U.S. Navy’s SUBSAFE program and an international oil and gas company discussed at the end of this section. Then, they must convince others to commit to and provide support for their efforts as well. People need to envision a compelling future state of safe operations and understand how their own behavior relates to achieving that vision if they are to have a clear sense of where they are going and why. People through- out the organization need to enact safety processes and practices, exhib- iting behaviors that often go beyond written requirements. A clear and engaging picture of leadership’s commitment to sustaining a strong safety

Strengthening the Safety Culture of the Offshore Oil and Gas Industry 21 CaRolyn Cole/geTTy

22 Beyond ComplianCe culture will invite people to action. They will see a future desirable enough to change the present to achieve it. Leaders who successfully implement an effective safety culture are highly visible role models who live safety as a value, consistently demon- strate the importance of safety-related behaviors, and instill the courage to change in others. They focus not only on getting results but also on getting results in the right way and behaving in accordance with the value of a strong safety culture. Workers, supervisors, and managers will not speak up about safety issues or be willing to stop work unless they believe their leadership will support them. Senior leaders may believe they are willing to support such actions, but if there is no precedent (or, worse, a history of negative reactions) and employees are afraid to even try, there is no opportunity to reinforce safe behaviors. Leaders need to be proactive with their messages and actions and ensure that no learning opportunity goes to waste. The Industry Is Fragmented and Diverse Drilling and production take place under many different organizational arrangements, from huge deepwater rigs with a large on-board staff (e.g., well over 100, including a diverse set of contractors and subcontractors) to small platforms that are unmanned or have just one or two crewmembers. Persuading each entity in such a fragmented industry to em- brace safety culture is challenging. Both the heterogeneity of organizations and people and competition make it difficult to set uniform rules that apply to all settings, reach industry-level agreements, or even share information. Efforts are under way through COS and BSEE to address this challenge by developing toolkits and guidance documents, but these efforts have not yet engaged the entire offshore industry. The economic costs and benefits and the cultural values around safety vary across the Bill vaRie/geTTy

Strengthening the Safety Culture of the Offshore Oil and Gas Industry 23 range of offshore operations, such as seismic, drilling, production, con- struction, and logistics (air and marine). Moreover, most larger operators and contractors recognize the benefit of investing in safety in light of the long-term risks to their operations and their corporate reputation of fail- ing to do so. Smaller operators and smaller contractors, on the other hand, are more varied in their approach to safety. Some have excellent internal communication and a focused and innovative approach with respect to safety, while others may maintain a mind-set and practices aligned with a minimum level of safety (e.g., less safety training, selection of contractors based on low cost without consideration for their safety records). Those who believe they cannot afford the near-term costs of investments in safety may withhold information about unsafe practices and accidents to mini- mize further costs (in terms of dollars and reputation). Even the most con- scientious organizations can be subject to greater pressure to deemphasize safety when projects run late and financial incentives are in jeopardy. Cultural issues also come into play. Many parts of the industry have a dispersed and multicultural workforce, which creates challenges either within a workplace, among contractors, or between contractors and their customers. Some cultural issues have ethnic or national origins. Some skilled craft workers in the Gulf of Mexico, for example, come from vari- aRnulf husmo/geTTy

John BaRRaTT/geTTy

Strengthening the Safety Culture of the Offshore Oil and Gas Industry 25 ous national cultures whose languages are not English and whose safety attitudes and practices may differ both from each other and from U.S. approaches. Some foreign-flag drilling rigs move around the world with long-term, non-American crews. These crews may have consistent exper- tise and a coherent rig culture (which may be very safe), but this culture may vary from that of the operator. Even within a single national culture, such as that of the United States, cultural and status differences exist among professional groups (e.g., engineers versus operators versus manag- ers), hierarchical levels, generations of workers, and local sites. Overcoming the Challenge Senior leaders in each company involved in offshore operations and lead- ers of industry associations need to demonstrate consistently their com- mitment to safety, aligning their actions with their words. The industry as a whole, led by the more progressive operators, contractors, and industry associations, needs to be thoughtful about extending safety culture to the heterogeneous organizations and workers in the offshore industry. Given the many groups that are stakeholders in the offshore industry, a coalition of informed, interested, and respected parties will be needed to influence others to participate. Culture cannot easily be imposed by one organization on another, whether it be large operators telling con- tractors or regulators telling operators how to think and act. A better strategy is collaborative engagement in which organizations with strong safety cultures persuade others to work together to improve safety culture industry-wide. The Industry’s Safety Culture Is Still Developing The heritage of the offshore oil and gas industry reflects the early risk- taking traditions of the onshore oil and gas companies, as well as the tradi- tions of the mining industry, which celebrated individual heroics rather than teamwork, discipline, rules, and protection of people and the envi- ronment. Like many other industries, the offshore industry has changed significantly since its earlier years. There are signs that the number of incidents is decreasing, and evidence indicates continual improvements in the industry’s safety efforts. It is more common today, for example, for anyone to report safety concerns or to stop a job. Variation in this regard

26 Beyond ComplianCe persists, however, as a result of both the industry’s heritage and the rapid growth in new operators and contractors. In this industry, moreover, as in many others, there is an existing culture of individual blame for noncompliance with rules. Unfortunately, a blaming culture often works against a reporting cul- ture. Thus workers are reluctant to report near misses or small accidents, which can be precursors of larger problems. In addition, problems may be hidden to avoid paperwork; please the boss; receive bonuses; or avoid management attention, peer annoyance, and regulatory enforcement. Even when reported, the incidents that garner attention are often those involv- ing minor personal injuries, transportation incidents, and spills (because they occur most frequently) rather than gaps in process safety that could be precursors of major accidents. Like most industries, the oil and gas industry as a whole does not consistently engage in systems thinking in which the interrelationships among events and practices are considered. Problems may be seen as one- off and each installation as unique. An operator may share lessons learned internally but be less inclined to share them with another operator. The tendency is to focus on immediate, proximal causes (such as human error) rather than systemic causes, including culture. Historically, fixes have been devised with little understanding of how they will be implemented and validated or what unintended consequences they might have. Overcoming the Challenge Many in the industry recognize the importance of engaging in systems thinking and deliberately managing the development of effective safety processes organization-wide. Even before the advent of SEMS, most in the industry had adopted a management system process that promotes philip goulD/geTTy

Strengthening the Safety Culture of the Offshore Oil and Gas Industry 27 goal setting and drives progress toward operations free of incident (includ- ing personal and process safety accidents, near misses, and nonconfor- mances). Plans are developed to close identified gaps, actions are taken, and results are reviewed for validation and learning purposes. Developing and sustaining a strong safety culture requires that all members of the workforce be competent relative to their assignments and accountable for established safety processes. Although senior leadership support is essential, positive safety changes also require the involvement of field supervisors and workers who are dedicated to safety improvement and equipped to achieve it with both authority and resources. The very concept of safety culture implies com- mitment and participation throughout the organization. Given the demonstrable progress being made toward strengthening safety culture in many parts of the industry, it is desirable to leverage indi- vidual successes to help accelerate progress industry-wide. Industry groups and regulators can help disseminate success stories and lessons learned. Operators can encourage and advise their contractors, contractors can encourage and advise their subcontractors, and vice versa. This industry u.s. CoasT guaRD phoTo By peTTy offiCeR 3RD Class paTRiCk kelley

28 Beyond ComplianCe can look to the success of the nuclear power industry in creating a strong industry-led organization (the Institute of Nuclear Power Operations) to set standards and facilitate knowledge sharing. Case Examples of Safety Culture Change Although there is no single recipe for developing and sustaining a strong safety culture, examples can be found in organizations that have been suc- cessful in a number of industries. The full report describes two examples of safety culture change—one from the U.S. Navy and one from a large offshore operator—both of which demonstrate dramatic improvements in safety that have been sustained over time. These examples highlight effective principles and processes rather than specific actions to be copied directly. The lessons illustrated by these examples include the following: • The structure of a safety program in terms of requirements and roles and responsibilities needs to be aligned with the balance of powers auRoRa open/geTTy