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What makes the safety regime distinctive?

How is safety regulated in Norway’s petroleum sector? What are the most important features of the “Norwegian model”? What was the safety regime like to begin with, why did it change and what are the fundamental principles for safety work today?

Official regulation of the Norwegian petroleum sector rests on the total responsibility of the companies to operate prudently. That principle forms the cornerstone of the whole safety regime.

Companies awarded production licences on the NCS are carefully vetted in advance, not least for their expertise, capacity and willingness to accept accountability.

Both the regulations and their enforcement are therefore organised to underpin the way this liability is experienced by the players.

Performance management is the key to the Norwegian regulatory regime. It means that the PSA, as the safety regulator, specifies the framework for company activities.

That contrasts with a detailed control regime, where the regulator largely dictates accepted solutions by stating specific requirements.Seeking to control petroleum operations in Norway is neither possible nor desirable. That would mean the government taking full charge of plans, drawings, specifications, procedures, personnel qualifications and so forth.

In addition, the regulator’s staff would have to be physically present on the facilities for much of the time – and call for a massive expansion in PSA personnel.

Detailed control could also affect the way the companies experience their responsibility.

Consent rather than approval

Under no circumstances will the PSA approve something – a facility, items of equipment, components, procedures, qualifications or the like.

This reflects the principle which says the companies must be conscious that they are responsible for their own activities. Any regulatory approval would shift responsibility to the government.

But the players do need a certain degree of predictability. It would be both unreasonable and inappropriate if they plan, build and install a facility only to discover that the regulator will not allow it to be used.

To deal with this and to ensure that the companies have things under proper control at key project milestones, the PSA’s consent must be obtained before key activities begin.

That formally expresses the authority’s confidence that the applicant can complete the relevant operation in a prudent manner and in compliance with regulatory requirements.

A consent relates to an activity. This means it does not represent any form of approval of a particular facility, for example.

In principle, it has no expiry date but applies as long as the relevant activity is due to last. Throughout that time, the company is responsible for checking compliance with the preconditions underpinning the consent.

Should a nonconformity be discovered, the player must take the necessary steps to rectify or remove this on its own initiative – so that safety is fully maintained.

The PSA’s view: A new company on the NCS may seem a solid player, but still needs time to build trust.

Supervisory activities

Even if a company is trusted and has received the required consent for its operation, the way it discharges its obligations must be monitored.

Such supervision by the PSA is risk-based. This means that audits or verifications are planned in terms of an overall assessment of where the risk is highest.

In other words, checking a facility at specific intervals is not a goal. Audits/verifications are based on random sampling rather than trying to cover all aspects of a facility.

Nonconformities identified in this way must be corrected. The most important concern is nevertheless to identify what failure in the player’s management system has caused the problem.

Once the company has found the answer to that, improvements must be made to prevent the same or corresponding types of faults from recurring.

This form of check has great utility, because it exposes the causes of an issue rather than simply identifying that something is wrong. It thereby also contributes to continuous improvement.

Investigating accidents and incidents has a benefit, too, because such inquiries focus on something which has actually happened and so provides valuable and relevant knowledge of risk.

The PSA’s investigations aim first and foremost at clarifying the course of events and the underlying causes, so that both industry and regulator can learn from these.

Uncovering possible criminal actions is not a goal. That is for the police. If the latter investigate an incident, however, the PSA will often be asked to provide technical assistance.

Then and now

Norway’s regulatory regime for the petroleum sector has changed over time from an initial approach based on specific requirements, checks, inspections and detailed orders.

Today’s system is characterised by performance management, a systems orientation and dialogue between the government and the companies.

Experience with detailed control

Making it clear what the government expected of the companies was important during the early years of Norway’s oil sector. This meant in part that the regulations went into particulars.

One consequence was that supervision focused on such details, usually followed by specific instructions to the companies about what needed improvement.

However, this system was eventually found to have considerable weaknesses. Only faults which had been discovered were corrected, without addressing their underlying causes.

The regulations therefore kept needing to be adjusted, while the industry found that the detailed requirements restricted opportunities for innovation and technology development.

The greatest source of concern was nevertheless that the regime did not help the companies to grasp their own overall responsibility. Nor was the climate of collaboration between regulator and companies good.

Benefits of performance management

Although the transition from the original reliance on detailed control to the present framework-based approach was gradual, it had some clear milestones. See the timeline on page xx.

The regulations were eventually reshaped to express which requirements must be met by the companies rather than specifying how this is to be done.

Today’s regulatory regime concentrates on safety management systems at the companies. When the PSA identifies nonconformities, the focus is on what has failed in these systems and how they can be improved to avoid the same type of fault in the future.

That helps to boost its knowledge of underlying causes, while the industry gets more back from the regulator’s supervisory efforts.

But the most important consideration is nevertheless that the present system clarifies the responsibility which rests with the companies.

Communication between government and companies is currently characterised by dialogue and collaboration over achieving improvements.

Trust and openness

Trust between companies, employees and government is not only a matter of creating a constructive climate for collaboration, but also fundamental to the Norwegian model of government regulation.

Should this mutual confindence decline, the basis for the present system would be significantly weakened – leading to greater detailed regulation and an approach characterised by more inspection and control.

Such trust does not just happen. It is built up gradually through dialogue and collaboration. A new company on the NCS may seem a solid player, but still needs time to build confidence.

Openness is an important factor in creating trust. Norwegian society has long traditions in this respect, particularly for public administration.

Put briefly, Norway’s Freedom of Information Act states that all correspondence, administrative procedures and the like are publicly available unless specific conditions dictate otherwise.

The PSA receives several thousand FoI applications every year, and only about three per cent are fully or partly refused with reference to exceptions in the Act.

Companies must feel assured that sensitive information will not go astray. The PSA accordingly makes a careful assessment of each application to decide whether it can be granted.

Tripartite collaboration

Cooperation between employers, unions and government has long traditions in Norwegian working life, where these are not simply opposing sides around the negotiating table.

They can also join forces in a constructive collaboration on improvements, including for safety and the workingenvironment – an asset all the parties say they want to preserve and develop.

Two important arenas have been established for such tripartite collaboration in the petroleum sector – the Regulatory and Safety Fora.

The Regulatory Forum is an arena for information sharing, discussion and feedback aimed at developing and maintaining framework documents for the petroleum sector.

Practical implementation and use of the regulations are discussed, and the members exchange views on the content of new and revised rules as well as on their experience of using them.

The Safety Forum facilitates and encourages collaboration and debate on key HSE challenges in the petroleum sector, both offshore and on land.

Chaired by the PSA’s director general, it comprises HSE personnel, executives and key decision-makers in the industry. The Ministry of Labour and Social Affairs (ASD) is an observer.

The forum is a consultation arena and an initiator of strategic HSE projects and processes in the PSA’s area of authority.

Also serving as a driving force for information and knowledge sharing on HSE, the Safety Forum has identified four priority areas for its work:

  • major accident risk
  • working environment risk
  • tripartite collaboration and employee participation
  • the importance of operating parameters for safety and the working environment.

Meetings take place five-six times a year, and an annual open conference is also staged to address key safety-related issues in the petroleum sector.

The PSA is very concerned to maintain tripartite collaboration in the industry.