Risk is managed from the top.
Management itself can be source of major accident risk.
Management’s knowledge of and attention to risk are crucial for a company’s ability to avoid serious accidents.
The trend can be reversed – but only if managements accept responsibility.
Where the buck stops
These assertions come from Sigve Knudsen, director of legal and regulatory affairs at the PSA. A former director of supervision, he has led work on management follow-up in recent years.
This has long been one of the PSA’s priority areas for supervision. In Knudsen’s experience, initiatives, priorities and decisions by senior executive are the key to how a company handles major accident risk – because they provide the scope for action in the rest of the organisation.
“We’ve taken a number of approaches to supervising company managements over the years,” he explains. “They’ve included enterprise management, management and major accident risk and management of major change.”
Asked why the PSA gives such high priority to management’s role, Knudsen notes that the leadership is the crucial starting point for work on risk, safety and the working environment.
“So it’s important to devote great attention to the policy shapers – those at the top of the industry. In today’s conditions, management actions are perhaps more important than ever.”
He explains that major change processes, management and operating parameters crop up repeatedly as underlying causes for major accidents, according to international analyses.
“These findings show that management was either insufficiently aware of risk conditions before an accident, or failed to understand and react acceptably to the information it had.
“The industry is characterised today by both changes to and pressure on operating parameters. Management’s role thereby becomes even more important for accident prevention work.”
The PSA’s supervision of management concentrated in 2016 on responsibility. This was related to the many changes under way, and to the ambition of continuous improvement in the industry’s safety level.
“Our aim has been to get senior executives to identify what risk could arise in connection with changes in their company,” says Knudsen.
“At the same time, we’ve also wanted to ensure that changes in the companies will contribute to improving safety and the working environment – and asked how management would make this happen.
“Last but not least, the goal of our activities has been to help management and employees to work together on solving joint challenges in today’s demanding conditions.
“Such bipartite collaboration has got to function, so that company leaderships and safety delegates can jointly reach good and robust decisions.”
Asked about the PSA’s experience of working on these issues, Knudsen says that none of the three objectives have yet been reached.
“There’s still room for improvement in all these areas.”
Need to aim high
Good enough – what sort of ambition does that express? Is good enough really good enough?
The expression good enough has frequently been heard in the petroleum industry of late. What this means and how it meets the overarching requirements for safety work are key questions for the PSA.
“The Storting [parliament] wants the industry to be a world leader for HSE, while the regulations target continuous safety improvement,” observes Sigve Knudsen, director of legal and regulatory affairs at the PSA.
“How does this ambition and this goal find expression in the search for cost reductions and the discussion on what is good enough? We see that perceptions vary among company managements.
“We never hear senior executives say they want a lower level of safety. Everyone stresses that the objective is safe and efficient operations.”
But he notes that views differ on the principle of continuous improvement, with some agreeing that this is significant for maintaining and developing a high level of safety.
“Others argue that we must be satisfied with the prevailing position, and that it is naive to believe in getting better while the industry remains in its present phase.”
Knudsen says his response would be that is not good enough to say that good enough is good enough if this means abandoning the principles of risk reduction and continuous improvement.
“That would not prevent people being injured at work, while also failing to live up to the political ambitions and the regulatory requirements.
“Creating, maintaining and developing a high level of safety and a good HSE culture in a business demands constant and active follow-up by management – and sometimes an extra effort.
“The signs are that an extra effort is precisely what’s needed now.”
"Its not good enough to say that good enough is good enough if this means abandoning the principles of risk reduction and continuous improvement."
Discord and consensus
Three big questions were put to the industry by the PSA during 2016. They have contributed to an important debate – but responses from management and employees have varied.
The PSA has concentrated in recent months on communicating overarching thoughts and issues concerning safety trends, and has asked the following questions in various arenas.
1. Is safety at a crossroads?
2. Is there room for improvement?
3. Is safety at risk?
Generally speaking, management says “no” to the first and third questions, and “yes” to the second one. Employees answer all three with a clear “yes”.
Sigve Knudsen, director of legal and regulatory affairs at the PSA, emphasises that everyone responding to its three questions agrees there is room for improvement. He sees this as positive.
“The great majority feel recent HSE trends have not been good. These answers also indicate a shared sense that the many big and swift change processes create uncertainty and can help boost risk.
“Both we as the regulator and the rest of the industry agree that the time has come to act. We can’t wait to see how things will turn out.
“Our perception is that the whole sector supports our ambition of reversing the trend. Everyone wants to get back on a positive track. That’s a good starting point for our commitment in 2017.”