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Building a responsible business

The whole purpose of the PSA can be summed up in a single word: safety – for people, for the environment and for the material assets managed by the industry.


This article was published in the publication "Safety - status and signals 2010-2011".

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In the broadest sense, all the PSA’s activities are directed at ensuring that Norwegian petroleum operations are conducted in an acceptable manner. That makes it important to place the responsibility where it actually belongs – with the industry.

Forged
Little or no relevant industrial activity existed in Norway when the oil companies arrived in the 1960s and a new administrative structure had to be forged by government.

The development of today’s Norwegian regulatory regime for oil and gas operations had to start from scratch. That was a challenge, but also an opportunity. It meant that the new Norwegian Petroleum Directorate (NPD) established in 1973 could be specifi cally tailored for the job.

At the same time, an important development occurred in the process industry. Attention shifted from conventional quality control at the end of the conveyor belt to further up the production line, and ultimately right into top management.

The NPD made a similar move to a new supervisory role, shifting attention from classic “shop fl oor” checks to work processes, decision-making mechanisms, management and control.

Changes
The supervisory approach being pursued on the NCS in 2011 is the result of a continuous series of changes and improvements since the early 1970s.

A bold step was taken by the safety authorities in 1981 with the introduction of a guideline for safety assessment of platform concepts which quantified an acceptable level of risk.

At the time, it was not considered “good form” to talk about risk. The little number 10-4, which was a way to describe risk, accordingly created some political disquiet.

Nevertheless, it was the passage of the new Petroleum Activities Act in 1985 which has been seen as the dividing line between old and new times.

This legislation marked an important step towards a more performance-oriented and risk-based system of government regulation.

Continued
Since being separated from the NPD in 2004, the PSA has continued the development initiated in 1973.

The number of players on the NCS has grown considerably over the past decade. A picture with a few large companies has been replaced by Statoil as the dominant operator and a range of small participants.

Despite this trend, the petroleum industry still comprises a limited number of well-resourced fi rms. It remains a capitalintensive and highly competent business facing big demands.

Among the latter are an independent duty to ensure that HSE is managed properly, that the regulations are observed and that operations are pursued in an acceptable manner.

The companies must be conscious of these reponsibilities.

Approaches
Roughly speaking, two approaches exist for regulating safety in the petroleum industry – detailed control and performance management.

The first of these rests on a regulatory system which sets specifi c requirements for the structures, technical equipment and operations required to protect against hazards and accidents.

In a model of this kind, the safety authorities defi ne the appropriate standards and check that the companies are complying with them.

Detailed control often encourages a passive attitude by companies. They expect the regulator to inspect them, identify errors and defi ciencies, and explain how these are to be corrected.

Functions
Performance management is the exact opposite. The regulations here are framed to specify the goals to be achieved – or, put another way, which functions must be fulfilled.

Norway’s petroleum regulations are based today on such functional requirements, which specify the level of safety to be achieved.

General
Many of today’s regulatory requirements are formulated in fairly general terms. As noted above, they primarily spell out which conditions or functions are to be fulfilled.

To avoid misunderstandings about what is needed to comply with the rules and to ensure predictability, a number of recommendations and guidelines have been provided.

These often refer to recognised Norwegian or international industry standards relating to structures, equipment and procedures.

Management
The regulator’s job is to describe which goals the companies must reach, and to ensure that they have established management systems which keep operations in compliance with the regulations.

Companies can to a great extent choose for themselves which solutions they will adopt in order to meet the offi cial requirements.

This Norwegian model is based on the conviction that the government cannot inspect quality into the industry. The latter must itself ensure that quality is achieved and maintained.

Keep pace 
Today’s solution means that the regulations do not need to be constantly revised in order to keep pace with technological advances and changes in operating mode.

In return, the PSA’s specialists must monitor and participate in developing and revising industrial standards to help make sure that these are constantly relevant and reflect best practice.

The work involved in a performance management system can easily be underestimated, so it is important to emphasise that this form of regulation demands much more of the industry, employees and government than detailed regulations.

That applies to expertise and management as well as flexibility. However, the payoff comes in the form of better safety management by an industry which has been given responsibility.

This article was published in the publication "Safety - status and signals 2010-2011".