Independent and competent: is it time to raise the bar?

Iain Light
Sunday, May 1, 2011

Competence testing, true independent oversight and a stronger focus on the human element are the lessons from Macondo, argues Lloyd's Register energy director Dr Iain Light.

The offshore industry has just had the dubious distinction of marking the first anniversary of the Macondo well tragedy in the Gulf of Mexico. That event, perhaps more than any other in the history of offshore drilling, was meant to herald in sweeping changes to our industry's safety practices.

There has certainly been a lot of recrimination, hand-wringing and well-meaning proposals in the 12 months since the destruction of the Deepwater Horizon. But as the public outrage about the loss of life and unprecedented environmental damage fades with each passing day, we should all ask ourselves: ‘Have we learned the lessons?'

The findings of the US National Commission on the health of the country's offshore industry in the wake of the Macondo well tragedy made for some pretty stark reading; the words of its co-chairmen, senators Bob Graham and William Reilly, were equally direct (OE last month).

Macondo, according to Graham, was a tragedy that ‘likely would not have happened' if there had been ‘the capacity and will to demand world-class safety standards'.

Insofar as the Commission recommended an overdue transition to a holistic ‘safety-case' risk-management regime – away from the historic prescriptive practices – their efforts were largely applauded and eventually may be seen as the right medicine for an industry that was, apparently, quietly ailing.

If the Commission's words are heeded, the importance of having the right kind of technical expertise and more independent oversight – of the operators and the regulators – should grow exponentially in the US and elsewhere.

This will present clear commercial opportunities for independent risk-management firms. What was less clear from the report were the qualifications companies will require to be considered ‘independent' or ‘competent' to perform what are becoming increasingly complex work programmes as the industry moves into more hostile environs in search of the remaining stores of fossil fuels. Clearly, there will be no shortage of ‘third-party inspectors' willing to do the work in the US; whether they are competent and truly independent is another question.

In the North Sea, the comparative environment most cited by the Commission's Report to the President (OE March), inspectors and their companies are ‘independent' according to the UK Offshore Installations (Safety Case) Regulations only when their relationship to the asset or system they are inspecting is removed enough ‘to ensure that [they] will be objective in discharging [their] function'.

The associated guidance issued by the UK HSE makes clear that those carrying out such work should be free from pressures, especially of a financial or operational nature, which could affect sound judgement.

It sets clear expectations for managing the potential conflicts of interest for inspectors which arise from: having to meet production targets; hoping to earn promotion or pay rises; incentives such as targets for key-performance indicators, all of which can influence otherwise sound engineering judgement.

In fact, some types of work (such as structural analysis) often require a completely separate assessment, using different personnel, modelling tools and even design methodologies. The Commission clearly identified events in the run-up to the Macondo tragedy where the inspectors were too close to the commercial end of the business to exercise sound judgement; another layer of qualifications in the US to define ‘independence' would strengthen the vital role of the third-party assurance agents who have become so critical to most major process industries. Clearly, this would make America's offshore industry safer.

With offshore drilling rigs earning $500,000 a day and more, the temptation remains strong to skirt safety and environmental requirements rather than shut down or limit operations for maintenance, or to wait for the appropriate expertise to become available. Third parties are not immune to these pressures. In fact, they are often contracted and paid by the parties for whom the pressure is most acute.

Moreover, the technical assurance providers themselves are in a constant struggle to win new work, with the inevitable pressure to lower their prices, which again can impact on the quality and integrity of the services they provide.

But, short of creating a monopoly to eliminate competitive pressure (and competitive pricing), there are basic steps that can be taken to ensure that the competence and independence of any industry's assurance providers remains robust.

Technical standards and a clear outline of the scope of thirdparty involvement need to be set and maintained by regulatory authorities, including the requirements for competency of the personnel carrying out the assessments. Any such organisation also should be required to be of sufficient size, with a diverse enough client-base, to ensure that it is not too commercially dependent on any one client or project.


That said, even the most rigorous qualifications for independence are unlikely to produce the required levels of safety and environmental stewardship unless the assessors are also proven technically competent.

The increasingly integrated and complex nature of modern offshore systems and processes requires comprehensive levels of technical understanding and experience; most often one project requires the skills of more than one person.

It's a size thing
The ability of an independent assurance provider to coordinate input from experts across a number of disciplines is a key to a successful outcome. So, again, the size of the organisation matters.

The bar needs to be set high. Every prospective assurance provider should be required to demonstrate having the knowledge, skills, experience and behaviours to be considered competent to perform a role.

Strength in one of these areas is not enough. In particular, a technical qualification alone should not be sufficient, particularly since there is growing acceptance that understanding and managing the human element is where the next significant advances in workplace safety will be made.

Huge advances have been made in the technical construction of marine and offshore infrastructure – as well as the management systems that support them – in the past two decades.

It is now industry consensus that more than 90% of incidents such as Macondo are caused by human failures of one description or another.

With equipment and systems increasingly ‘safe by design', understanding the influence that an organisation's work-place culture has on maintaining and improving safety standards is critical.

Employee familiarity with state-of-the-art warning systems is just as important as the ability of the system itself. Just as having the expertise to recognise when an asset is not performing safely means little if company employees lack the courage or management culture to report it.

The offshore industry is evolving. Risk levels are rising proportionate to the more dangerous environs we are exploring and the technical complexity of the infrastructure we need. So the qualifications required to provide independent technical assurance far exceed those needed for a one-off assessment of a blowout preventer.

To provide effective technical assurance, a company needs a deep knowledge of how people, plant and process interact – and the integrity to exercise clear judgement. OE


About the Author

Iain Light
is group energy director for Lloyd's Register. Based in Aberdeen, he is responsible for developing strategy and ensuring that the group has ‘the right services for an increasingly complex energy sector'. Light lays claim to more than 30 years' experience in ‘making the offshore industry a safer place to work' and since joining Lloyd's Register in November 2007 – after 16 years with DNV – has guided a number of telling acquisitions, including drilling rig safety and technical assurance services provider ModuSpec and Norwegian technical risk-assessment company Scandpower.
 

Categories: Europe North America Safety & Security

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