Supervision audit report

North Sea Offshore Authorities Forum

MULTI-NATIONAL AUDIT

‘SUPERVISION’

‘Supervision is an ongoing process, not an event’

2007-2009

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DOCUMENT APPROVAL

Vincent Claessens (6) State Supervision of Mines (NL) Audit Team Leader Dave Forsyth (5) Health and Safety Executive (UK) Deputy Audit Team Leader Sigvart Zachariassen (2) Petrolem Safety Authority (N) Audit Team Member – Focal point Norway Kirsten Lundt Erichsen (4) Danish Energy Authority (DK) Audit Team Member – Focal point Denmark

Jos Marx (7) Irene Bergljot Dahle (3) State Supervision of Mines (NL) Petrolem Safety Authority (N) Audit Team Member Audit Team Member Mohamed El Halimi (1) Anna Kristine Oma (8) Danish Energy Authority (DK) Petrolem Safety Authority (N) Audit Team Member Audit Team Member (part time / left PSA) Heidi Nexo Rob Miles Danish Energy Authority (DK) Health and Safety Executive (UK) Audit Team Member (part time / left DEA) Audit Team Member (part time)

State Supervision of Mines Ministry of Economic Affairs

(1) (2) (3) (4) (5) (6) (7) (8)

OSLO / 25th of August 2008

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CONTENTS

DOCUMENT APPROVAL ......................................................................................................iii CONTENTS ............................................................................................................................... v EXECUTIVE SUMMARY...................................................................................................... vii 1. INTRODUCTION................................................................................................................ 1 2. TERMS OF REFERENCE and AUDIT OBJECTIVES...................................................... 3 3. METHODOLOGY, SCOPE and PLANNING .................................................................... 5 4. AUDIT OBSERVATIONS .................................................................................................. 9 5. AUDIT CONCLUSIONS .................................................................................................. 11 6. AUDIT FOLLOW-UP INITIATIVES............................................................................... 15

Appendices A1. Audit aspects and observations A2. List of references A3. European and national legislation A4. Inspection toolkit ‘Supervision’ A5. Glossary and abbreviations A6. Terms of Reference A7. Literature review highlights A8. Leadership Commitment Model A9. Template example

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EXECUTIVE SUMMARY

Introduction of the NSOAF The North Sea Offshore Authorities Forum (NSOAF) consists of representatives of authorities responsible for the supervision of offshore activities in North West Europe. The current membership represents Denmark, Faro Islands, Germany, Republic of Ireland, the Netherlands, Norway, Sweden and the United Kingdom. The NSOAF was founded in 1987. It has one common aim: “Ensure and encourage continuous improvement in Health, Safety, Environmental Care and the Welfare of offshore workers” The members of NSOAF have an annual plenary meeting in which activities are summed up and new tasks are initiated and discussed. This work primarily takes place through the five following permanent working groups: Training, HS&E, EU (European Union), Wells and CCS (Carbon Capture & Storage).

Mandate, methodology, scope and planning Regularly multi-national audits are carried out by NSOAF. On the basis of a mandate from the 2007 plenary meeting, the audit ‘Supervision’ was initiated and carried out jointly amongst four Authorities (SSM, HSE, DEA and PSA). A bottom-up approach was chosen, from the worksite to the boardroom. The audit started with an introduction to onshore management and a document review, followed by a three day offshore platform visit. In total 13 offshore platforms were visited, with eight operators involved. After the completion of all the offshore visits, the audit team evaluated the observations and findings. On basis of this review several industry-wide challenges were defined. Also a ‘Leadership commitment model’ for the aspect ‘supervision’ was developed and accepted by the team. These two elements were used during the interviews with the onshore line management. The audit was scheduled and executed during 2008 and early 2009.

Audit conclusions Although the companies audited were selected as representative of the industry in size and operation, and with a degree of cross border operations, the sample size does not permit firm judgments to be made on the industry as a whole. However, the following key strengths and key challenges were identified as common to all of the companies audited and therefore very likely to represent the industry-wide position.

Key Strengths:

1. The importance of supervision is well recognized and understood by personnel at all levels. Therefore, supervision aspects were observed to be well covered in the various management systems. 2. The need for supervisors to have management skills such as, inter personal communication, safety leadership, intervention, coaching etc. commonly called ‘Soft Skills’ is recognized and accepted. Training exists for these as well as company initiatives for improvement in these areas. 3. The need for effective competency assurance is recognized and accepted.

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4. Management consider that offshore supervisory input to the offshore resource and activity planning process as crucial.

Key Challenges:

1. The assurance of contractor supervision competency; 2. The provision of adequate supervision; 3. Monitoring of supervisory performance; 4. The assurance of supervisory knowledge and management of safety barriers.

Audit follow-up initiatives On the yearly plenary NSOAF meeting on 29th April 2009 in Hanover, the following initiatives were agreed on:

1. Each regulator shall send the audit report, accompanied with a cover letter to all their relevant E&P North Sea Operators and Trade Associations. The letter shall emphasize the potential lateral learning amongst the E&P operators concerning the different aspects related to supervision. Also a statement about the importance of the following different aspects of safety barrier management shall be included: safety barrier knowledge, recognition of barrier degradation and/or decay by supervisors and managers, and their competency to manage these safety barriers. 2. A toolkit for worksite visits including safety interventions for supervisors shall be developed by the industry for the industry. 3. A study shall be initiated of what is existing in the literature about learning from incidents/accidents/near misses. 4. If opportunity arises, each regulator shall promulgate the audit findings at offshore workforce events: i.e. OIM meetings, workforce involvement gatherings, trade associations exchange meetings. 5. ‘Supervision’ will be one of the themes at the second NSOAF conference in 2010.

Audit overall conclusion The objectives of the audit were met conform to the Terms of Reference. During the audit process lateral learning amongst the participating regulators has been achieved through the several planned audit team meetings by developing common interview templates and by sharing observations and conclusions. The aspects of supervision were challenged at different stages of the audit and at different levels (bottom-up approach: from worksite to boardroom) within the organization of the operators audited. The operator view on industry-wide challenges was also part of the audit. As a spin-off of the audit it was agreed on various follow-up initiatives which are a good incentive for the European offshore industry to improve the effectiveness of supervision. ‘Supervision’ will be a theme at the second NSOAF conference in 2010.

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1. INTRODUCTION

Supervision and Health and Safety

Supervision is a management function and therefore a key component in any effective safety management system. It may be more fully described as:

“Supervision is a critical management function that can be delivered by one or more individuals within and/or external to a team. It involves controlling, influencing and leading a team. People with supervisory roles are expected to maintain discipline, to take responsibility, and be held accountable for the actions of a team” (see appendix-A2, ref.10)

This and other research carried out on behalf of the HSE, which provided the basis for the audit, identified a number of ‘Success Characteristics’ that are typically observed in organisations that achieve good safety performance, supervision having a key role in their implementation.

They include: ƒ Demonstrating senior management commitment to health and safety so that ‘stakeholders’ are in no doubt about how important health and safety is to the organisation, ƒ Leadership during normal and abnormal situations, ƒ Communication within and between teams and between employees and management to ensure effective and efficient flow of information, ƒ Employee involvement in health and safety to improve understanding and gain ownership, ƒ Defining clear roles and responsibilities, ƒ Training and competence.

Historical accident data has shown that management and supervision have been identified as significant organisational factors affecting accidents. Supervision is a safety barrier to accidents. It should therefore also incorporate the control over situational awareness or risk perception, compliance and competence.

2. TERMS OF REFERENCE and AUDIT OBJECTIVES

At the 20th North Sea Offshore Authorities Forum (NSOAF) annual meeting in Haugesund (Norway) on April 2007 the Terms of Reference was agreed.

The objectives of the audit are formulated in the Terms of Reference as follows;

1. To persuade the NW-European E&P offshore industry of the necessity to: a. Improve supervision as being a crucial aspect in the risk management process b. Improve the effectiveness of supervisory roles and responsibilities and the involvement of (senior) management in the safety management system c. Develop and share and adopt best practices of supervision 2. To obtain further evidence of consistency of approach by individual Regulators in the North Sea. 3. To share the audit outcome with the NW-European E&P offshore industry trade associations. 4. To share the audit outcome with IRF.

The objectives were met by the following actions;

1. For each company audited a three day visit to one offshore installation was carried out. During this period several meetings were attended and many interviews were taken from various employees at different levels. Workplace visits formed also part of the offshore visit. The crucial aspect in the risk management process played a central role during the offshore visit. The effectiveness of supervision and the involvement of onshore senior management in the supervision process was discussed with several senior managers at their offices. The involvement was assessed by using a ´Leadership Commitment Model´ (see appendix­ A8). Special attention was paid during the visits regarding improvement initiatives of the different companies.

Note: A key objective was to persuade, however, very early on during the audit process it was recognized that there was no necessity for this with any of the companies involved.

2. The consistency of audit approach was established by piloting a user guide. Agreed templates were established as tool for the interviews and worksite visits. In appendix-A4 an inspection toolkit ´Supervision´ has been put together by HSE for future use on discretion of the other NSOAF members.

3. The audit outcome and follow-up initiatives will be shared with the NW-European E&P offshore industry trade associations at the NSOAF conference in 2010. 4. The audit outcome will be shared with the IRF in the second half of 2009.

3. METHODOLOGY, SCOPE and PLANNING

3.1 Methodology

The methodology recognises the fact there are many different ways of delivering supervision, and they all have different strengths and weaknesses. A bottom-up approach was chosen. That is from the worksite to the boardroom.

Bottom-up approach

National Field visit National office visit office visit

Senior Introduction manager audit plan

Direct Line Document manager review Audit OIM findings presentation ------------ Workplace National management

The audit started with an introduction to the onshore management and a document review, which was carried out with company representative(s) familiar with the relevant documentation.

The next step was a three day offshore platform visit. During the platform visit the offshore manager (OIM), supervisors and workforce were interviewed, individually and/or as a team. Informal talks were held with personnel (tea-shack) as well as worksite assessments, real and fictive.

After the offshore visit, interviews were held with onshore line managers. Where necessary follow-up interviews were held with the onshore managers to discuss the outstanding issues from the first interviews.

Each audit was then reported back to the onshore management. An important purpose of the onshore activity was to let the management comment on the observations from the offshore visit.

During the offshore and onshore meetings the following was especially addressed; ƒ Focus on safety culture and process safety ƒ The use of common inspection templates for each supervision topic to ensure consistency in execution ƒ Focus on only production/maintenance process ƒ The identification of barriers and suggestions for improvement and best practices ƒ Supervision of contractor personnel

3.2 Scope

The following production platforms and companies were chosen to be, as far as the small sample size would allow within the audit programme, representative of the North Sea offshore operation, taking into account such characteristics as size, nationality, cross border operation etc.

AUDITS

Regulator Company Offshore in charge installation

Total L7CC SSM GdFSuez L10-complex Shell K14-FA-1C BP Ravenspur North Shell Nelson HSE Talisman Tartan Total Dunbar Conoco Philips Ekofisk field C. Talisman Gyda PSA BP Valhall Shell Draugen Maersk Gorm DEA Dong Siri

SSM: State Supervision of Mines HSE: Health and Safety Executive PSA: Petroleum Safety Authority DEA: Danish Energy Authority

3.3 Timetable

At an early stage, the initial project meetings and pilot inspection identified that lateral learning would be more effectively achieved by more frequent project meetings- given the constraints of costs and logistics associated with joint inspections- and not by joint inspections as initially intended by the ToR.

4. AUDIT OBSERVATIONS

Although the companies audited were selected as representative of the industry in size and operation, and with a degree of cross border operations, the sample size did not permit firm judgments to be made on the industry as a whole. As a way of breaking the subject of supervision in to auditable topics the audit team identified the following 12 key aspects of supervision

1. Selection, training & assessment of supervisors 2. Supervisory roles, responsibilities and accountabilities 3. Organisational support for supervisors 4. Supervision delivery and planning / performance indicators 5. Contractors and supervision 6. Valuing subordinates / workgroup participation / decision making 7. Communication / handovers 8. Supervisory worksite visits 9. Learning culture / supervision and accidents/incidents 10. Process safety 11. Procedures & instructions 12. Leadership

For all twelve aspects several templates were set up (a total of 50). Each template being an assessment tool supporting the evaluation process. Each template contains topic background information and guiding questions (see appendix-A9). All templates were compiled in a user guide. All regulators audited several companies in their own country. As many of the observations were specific to each company, the audit team decided to round off each audit on company basis. In appendix-A1 observations are listed, but should not be read as common across the companies audited

In view of this NSOAF audit composite report, the audit team found it more appropriate towards the E&P industry in general to identify the key strengths and key challenges that were found to be common to all of the companies. These are provided in the chapter-5 ‘Audit Conclusions’.

5. AUDIT CONCLUSIONS

5.1 Key Strengths

1) The importance of supervision is well recognized and understood by personnel at all levels. Supervision aspects were observed to be well covered in the various management systems. Although the supervision process was not normally identified as a discrete part of the management system, it was clear that the focus of companies was to ensure effective supervision as intended by the management system. One of the key objectives identified in the ToR was to persuade the industry of the necessity to improve supervision. However, given the foregoing, persuasion on the importance of supervision was not necessary with any of the companies inspected.

2) The need for supervisors to have leadership skills such as, inter personal communication, safety leadership, intervention, coaching etc. commonly called ‘Soft Skills’ is recognized and accepted. Training exists for these as well as company initiatives for improvement in these areas.

3) The need for effective competency assurance is recognized and accepted.

4) Management consider that offshore supervisory input to the offshore resource and activity planning process.

5.2 Key Challenges

The audit team considers the following to be the key challenges that are applicable to the North Sea E&P industry.

1) The assurance of contractor supervision competency;

Operators heavily rely on contractors supervisors in their own organisations as well as the use of specialist contractors supervisory staff for special activities. These supervisors are key figures in managing safety prevention barriers. In order to carry out this duty they must have the relevant competencies i.e. technical, situational awareness / risk perception and soft skills. The challenge of the operators is to ensure that the contracting process contains safeguards to assure that the delivered supervision by contractor supervisory staff meets the agreed standards.

Related issues: ƒ A contractual agreement of supervision competency and the process by which this is assured e.g. contractor appraisal system that includes monitoring/appraisal reports from the operator ƒ The auditing by the operator of the contractors’ competency systems against agreed standards/processes ƒ Industry-wide competence training: companies appear to be trying to provide competency training individually rather than on a common industry wide basis,

even though the company identified competencies required by supervisors has a very high degree of commonality in the industry. ƒ Small contractor companies find it difficult to maintain effective appraisal systems

2) The provision of adequate supervision;

This challenge appears to issue from a current industry – wide demographic and manpower economics situation. That is, there is a general lack of skilled/knowledgeable/experienced supervision personnel. This is at a time when there is a high industry – wide necessity to backfill supervision posts due to retirements and to meet the growing supervision demands of extended and upgraded field life plans and related installation integrity and modification work.

Related issues: ƒ Those identified for promotion having to take on supervisory roles quickly and ahead of what were previously agreed training/assessment/mentoring timetables. ƒ Lack of awareness of impact of organisational changes e.g. flat organisation to supervision. ƒ Increase in supervisory workloads and control-span ƒ The supervisor’s job may not be desirable because of supervisory workload and pressures. Those who raised this issue did not refer to rewards but said that the effort required was too great. If this view is in anyway wide spread it could cause additional serious long term implications for staffing, recruitment and retention. ƒ Sufficient time and resources for defined essential supervisory tasks. A common observation was a high and growing administrative demand on supervisors. ƒ For example, there was anecdotal evidence that the role of onshore support appears to be reversing due to heavy traffic of requests to supervisors for technical information, system/process checks etc. from onshore staff (UKCS). On the other hand, it was observed that efforts are being made to move administration to onshore, i.e. related to maintenance activities. ƒ The quality of activity and resource planning ƒ Senior management response and commitment

3) Monitoring of supervisory performance;

Regular monitoring and assessment of supervisory performance is necessary to verify the effectiveness of the