Process safety leadership findings of Energy Division inspection programme

Process Safety Leadership Findings of Energy Division Inspection Programme February 2025

Contents

Glossary 2

Executive Summary 4 Main Findings 4

Background 7

HSE Inspection Programme 8 Identifying Duty Holders 8 Conducting the inspections 8 Feedback on Performance 9 Industry Reflections on HSE Approach 9 Regulatory Focus Beyond 2024 10

HSE Findings 11 Impact of Size and Nature of Duty Holder 12 CMAPP Implementation 13 Leadership 14 Audit and Assurance 20 Risk Management 21 Organisational Change & Resourcing 24 Contractor Management & Engagement 26 Process Safety Improvement Plans 28 Sharing and Learning 29 Workforce Engagement 31 Ageing Life Extension and Cessation of Production 32

References 34

Glossary

ALE Ageing Life Extension

CBT Computer Based Training

CMAPP Corporate Major Accident Prevention Policy

COMAH Control of Major Accident Hazards

CoP Cessation of Production

DLR Defined Life Repair

EMM Enforcement Management Model

ESR Elected Safety Representatives

HCR Hydrocarbon Release

HSE Health and Safety Executive

ICP Independent Competent Person

IMT Inspection Management Team

LOF Life of Field

LOPC Loss of Primary Containment

MAH Major Accident Hazard

MOC Management of Change

NED Non-Executive Director

NPI Non-Production Installation

OEUK Offshore Energies UK

ORA Operational Risk Assessment

POB Persons On Board

PPSL Principles of Process Safety Leadership

PSIP Process Safety Improvement Plan

PSLG Process Safety Leadership Group

PSLP Process Safety Leadership Principles

PSPI Process Safety Performance Indicators

RACI Responsible, Accountable, Consulted, Informed

SCR Safety Case Regulations

SECE Safety and Environmental Critical Element

SEMS Safety and Environmental Management System

TA Technical Authority

TOR Terms of Reference

UKCS United Kingdom Continental Shelf

Executive Summary

Failures in effective process safety leadership / process safety management can be linked to historical Major Accident Hazard (MAH) events such as Piper Alpha, Buncefield and Texas City amongst others. In 2018, HSE flagged concerns to the offshore industry regarding stagnating safety performance and challenged industry to respond leading to the adoption of the Principles of Process Safety Leadership (PPSL).

In January 2022, HSE Energy Division initiated a targeted inspection programme across a sample of the UKCS production operators to assess how industry had responded to the challenge laid out in 2018.

A total of 13 operators were inspected by the end of the inspection programme in May 2024 with an additional inspection conducted in October 2024. The organisations sampled covered the range of operating models in the UKCS and the different types of installations in use.

Inspections were conducted using established HSE guidance on Major Hazard Leadership and carried out by a dedicated core team to ensure consistency of approach and comparison of performance. Benchmarking of Duty Holders against their industry peers was not conducted, neither were scores assigned.

Main Findings As a collective, industry demonstrated a strong understanding of the importance of effective process safety leadership and there were examples of good practice observed.

There were however several consistent themes from the programme, all of which have room for improvement.

The themes were not unique to individual organisations and there is potential for industry collaboration on certain areas to drive improvement.

Strengths • Senior leaders understand their responsibilities for MAH management and were clear on their expectations and exhibiting the correct behaviours. • MAH performance is regularly reviewed at leadership meetings. • Industry has responded positively to the initiative and proactively engaged with HSE and industry peers.

• Significant time and effort has been invested by organisations into assessing their own performance against the principles and identification of any gaps. Improvement plans have been developed and are now being resourced and targeted at the key areas. • Increased collaboration between organisations with greater sharing of lessons learned from the inspection programme, discussion of areas of good practice and areas for improvement. This is a significant improvement on previous industry interaction and should be built upon by extension into other areas of learning, e.g. incidents and high- potential events. • Workforce engagement and utilisation of the Elected Safety Representative (ESR) function is a strong positive. Clear two-way communication and messaging to the frontline work force on expected standards of behaviour.

Weaknesses • Industry has reached ‘normalisation of deviance’ with organisations more willing to accept degradation of MAH barriers without acting. Knowledge and appreciation of the overall risk profile is improving. Work in areas such as maintenance backlog reviews has helped, but further work is required in order to fully understand where an organisation may be exposed. • Cumulative risk continues to be a challenge. All organisations have developed cumulative risk tools but continue to struggle with demonstrating robust assessment and recording of decisions including where the decision made was to not intervene and cease production. • Audit and assurance is ineffective and is failing to identify areas of weakness. Organisations have not fully implemented industry guidance in this area. Weaknesses in the audit and assurance systems is preventing senior leaders from being assured of the ongoing effectiveness and suitability of the Safety and Environmental Management System (SEMS) and the Corporate Major Accident Prevention Policy (CMAPP). • Industry headcount has reduced significantly with many organisations potentially under-resourced in critical areas, which is having a direct impact on MAH management. There is increasing evidence that competency within the workforce has reduced. • Increase in the number of new recruits in industry (commonly referred to as ‘green hats’) is placing a burden on the offshore workforce. Insufficient time is being spent as part of the contractor on-boarding arrangements to ensure competency of individuals and correct behaviours. • Contractor engagement remains focused on personal safety with limited consideration of the impact that contracting organisations can have on MAH management. • Effective process safety leadership is being driven by individuals instead of an ingrained part of the organisational structure or culture. • There is an absence of a structured MAH competency framework and training for senior leaders.

• There are early indications of a drop-off in workforce understanding and appreciation of MAH risk. Industry needs to ensure that the workforce remains fully engaged and that efforts are made to provide the relevant awareness training. • Learning and improving. The PSLP inspection programme has not identified any new themes which have not been identified by HSE previously either through routine inspections or other key programmes such as KP3 [1] and KP4 [2]. Gaps in understanding can be linked to the loss of corporate knowledge / memory as a result of headcount reduction or change in personnel responsibilities.

Opportunities for Industry Collaboration Regulation 32 of the Offshore Installations (Offshore Safety Directive) (Safety Case etc) Regulations 2015 requires Duty Holders to co-operate with a view to driving improvement in MAH management.

All organisations are facing similar challenges around ageing installations, reduction in resources and financial pressures. Industry has demonstrated through the Process Safety Leadership Principles (PSLP) inspection programme and the Maintenance Backlog initiative that they can drive improvement through collaboration.

Senior leaders should therefore consider how their organisations can collaborate further on the weaknesses identified above and elsewhere in this report to drive continuous improvement.

Potential areas for consideration:

• Contractor engagement and management. There are a limited number of service companies providing the majority of services within the UKCS. There is benefit of bringing them together as a collective to discuss the areas of concern and potential collective working or improvements. • Forward planning of work fronts and major campaigns. The lack of long-term lookahead is impacting on industries ability to secure adequate competent resources. Collaboration between organisations and contracting companies to establish long-term opportunities will likely aid the situation. • Continue to develop and broaden good practice. Companies should look to engage with, and support, the various initiatives currently underway with industry to share knowledge and learning. Existing resources, e.g. audit and assurance, should be reinvigorated. • Consistency in MAH training and competency frameworks. The commonality of MAH risks across the basin gives an opportunity for a standardised approach to be adopted.

Background

In the aftermath of Buncefield, the onshore Process Safety Leadership Group (PSLG) created the PPSL with the aim of improving process safety within their allied industries, specifically targeting the senior leaders of industry. Until 2019, the offshore oil and gas industry had no equivalent.

In 2018, HSE flagged concern regarding stagnating (if not deteriorating) safety performance in the UKCS. Hydrocarbon release (HCR) performance had plateaued with a peak of 6 major1 releases. Routine inspections and reactive investigations conducted by HSE continued to identify that failings could be traced to ineffective process safety leadership.

In response to HSE concerns, industry agreed to adopt an offshore equivalent of the PPSL [see Figure 1] and which were then re-affirmed in 2023. At the time of adoption, HSE committed to undertaking a series of targeted inspections from 2020 onwards with the aim of determining how individual organisations were embedding the principles within their business and how industry, as a collective, was driving improvement. Due to the COVID pandemic in 2020/ 2021, the inspection programme was delayed, ultimately commencing in January 2022.

Figure 1 – Industry Adopted Principles of Process Safety Leadership

1 A major HCR is deemed to be that of sufficient rate and / or duration that has the potential to escalate into

an MAH event.

HSE Inspection Programme

Identifying Duty Holders In identifying Duty Holders to be subject to a targeted inspection, HSE proceeded on the basis of:

• Maximising regulatory impact to organisations present in the UKCS by targeting the higher risk areas present in the basin. • Striving to inspect the ‘breadth’ of the operator types present in the basin wherever possible, i.e., large scale operator down to smaller new entrant or single installation operator. • Inspecting operators of sufficient size and / or influence within the UKCS in order to engage the remaining organisations via output / feedback.

With regards to maximising regulatory impact through targeting of higher risk areas, the following additional aspects were taken into consideration:

• Inspection history including enforcement, hydrocarbon releases (frequency, type and size) and other RIDDOR reportable events. • Installation Persons On Board (POB) allowances (risks to persons). • Installation ages and current lifecycle forecast, e.g., predicted Cessation of Production (CoP) date. • Design life (as identified in safety case) versus operational life and consideration of Ageing Life Extension (ALE) work.

Following due consideration of the above points and after internal consultation, thirteen (13) duty holders were initially identified for inspection. Duty Holders have not been identified in this report.

Conducting the inspections The inspection programme was conducted over the period January 2022 to May 2024. Six (6) inspections were conducted between January 2022 and March 2023, with the remaining seven (7) completed between April 2023 and May 2024.

An additional inspection was conducted in October 2024 but was separate to the core programme. The findings of that inspection have however been considered in the conclusions made in this report.

Inspections, wherever possible, were completed by a dedicated core team of specialist inspectors from the following disciplines:

• Process Safety / Process Engineering • Fire, Explosion and Risk Assessment • Mechanical

In addition to the above disciplines, the IMT focal point inspector also formed part of the inspection team for their Duty Holder. Conducting the inspection using the same core team ensured consistency of approach and allowed for fair comparisons to be made between Duty Holders over the course of the programme.

All inspections followed a consistent framework, utilising the COMAH Major Hazard Leadership Intervention tool [3] as a basis and supplemented with internal intelligence on individual Duty Holders. In advance of inspections commencing, Duty Holders were afforded the opportunity to provide HSE with any documentation they felt relevant as well as provide an overview presentation of how they complied with the leadership principles.

A breadth of Duty Holder personnel were interviewed as part of each inspection, starting at the top of the organisation (CMAPP signatory) through to the ESR to ensure “boardroom to control room”. By the end of the programme, in excess of 160 interviews had been completed.

Feedback on Performance Duty Holders were provided feedback on their performance on completion of the inspection. Feedback was in the form of a presentation which covered both areas of good practice and potential areas for improvement or further consideration.

Where regulatory compliance gaps were identified, enforcement action was taken in accordance with the Enforcement Management Model (EMM).

Benchmarking of Duty Holders did not form part of the HSE objectives and as such no Duty Holder was advised of their relative performance against their peers. Inspection scores were also not assigned given the wide scope of the inspection.

Industry Reflections on HSE Approach As part of the process, all Duty Holders were afforded the opportunity to provide feedback on their individual inspections or the programme itself, including where improvements could be made by HSE.

Feedback from individual organisations resulted in alterations of HSE’s approach over the course of the programme. These changes were made to make the process more efficient and did not alter the depth of inspections conducted.

Feedback from the programme was broadly positive with only one organisation citing it as a negative experience. Key themes were:

• Appreciation of HSE engagement at senior levels in the organisation. • Inspections had shifted the focus internally, requiring companies and individuals to reflect on their own practices. • Interviews were conducted in a positive manner, focussing on open discussion and dialogue. • HSE focus had resulted in greater engagement and collaboration between industry peers.

Regulatory Focus Beyond 2024 The targeted inspection programme will not continue beyond 2024. Consideration was given to extending the process to owners / operators of Non-Production Installations (NPI) however the benefit of doing so was not considered commensurate to the level of effort required by both industry and HSE.

Terminology will also change with HSE now referring to Major Hazard Leadership instead of Process Safety Leadership.

Major Hazard Leadership will continue to be a focus for HSE through the following mechanisms:

• Routine inspections as part of the annual intervention plan either by IMT focal point inspectors or relevant topic specialists. • Annual review process (formerly Major Hazard Management Review). Senior leaders will be required to demonstrate their ongoing commitment to the principles including how they are embedding them within their organisation and supporting the wider industry. • Targeted in-depth leadership inspections will continue to be carried out where HSE identifies a requirement to do so.

HSE will continue to engage with relevant industry stakeholders to ensure continual focus and improvement. Anonymous feedback will be provided on any common trends or themes that HSE identifies through its routine intervention process.

HSE Findings

In assessing Duty Holder compliance against the principles, the COMAH Major Hazard Leadership Tool was used as a baseline. Duty Holder performance was also assessed against the framework arrangements outlined in the agreed PPSL, namely:

• Process safety accountabilities should be defined and championed at the senior leadership team level, and all should be held accountable for process safety leadership and performance. • At least one senior leader should be fully conversant in process safety management in order to advise the leadership team of the status of process safety risk management within the organisation and of the process safety implications of their decisions. • Appropriate resources should be made available to ensure a high standard of process safety management throughout the organisation and staff with process safety management responsibilities should have or develop an appropriate level of competence. • Organisations should develop a programme for the promotion of process safety by active senior management engagement with the workforce, both direct and contract staff, to underline the importance of process safety leadership and to support the maintenance of a positive process safety culture within the organisation. • Systems and arrangements should be in place the ensure the active involvement of the workforce in the design of process safety controls and in the review of process safety performance. • Business risks relating to process safety should be assessed and reviewed using an appropriate business risk analysis methodology. • Leading and lagging process safety indicators should be set for the organisation and reviewed to ensure they remain appropriate for the needs of the business. Information on process safety performance should be routinely reviewed by the senior leadership team. • Companies should actively engage with others within their sector and elsewhere to share good practice and information on process safety incidents that may benefit others. Companies should have mechanisms and arrangements in place to incorporate learning from others within their organisation. • Systems and arrangements should be in place to ensure the retention of corporate knowledge relating to process safety management. Such arrangements should include information on the basis of safety design concept of the plant and processes, plant and process changes, and any past incidents that have impacted on process safety integrity and the improvements adopted to prevent a recurrence.

For ease of understanding and interpretation, findings have not been listed against each individual principle and instead have been structured around common areas.

Process Safety Management and MAH Management

Good process safety management practices will support effective MAH management.

Process safety management and MAH management are used interchangeably throughout the report depending on the context of the discussion point.

Impact of Size and Nature of Duty Holder The inspection programme was successful in targeting the breadth of Duty Holders present in the UKCS. Ranging from large international organisations with multiple assets through to independent operators with a single operational asset in the UKCS as well as those organisations operating installations on behalf of others.

Size and Nature of the Duty Holder

The size and nature of the Duty Holder is an influencing factor on process safety performance and the success of embedding the principles.

The majority of organisations are actively striving to improve and had invested significant time and effort into assessing their own vulnerabilities / areas of weaknesses in advance of the HSE inspection.

All Duty Holders were found to have areas for further improvement as well as exhibiting examples of good practice. Key takeaways from the inspection around the impact of Duty Holder size were:

• Larger