Offshore Industry: Current Risk Management Cultures and Regulations
What are the advantages and disadvantages of the current existing regulatory risk management cultures within the offshore industry? Will the regulatory standards tighten to protect the environment or are there other ways that may even induce a win-win-situation?
(firmenpresse) - In the last 5 years, the offshore industry has suffered majorly from spills and other accidents. This made it a main target for public concerns and led to numerous appearances on the front pages, thus suffering from heavy PR losses and facing more regulatory pressure in the future. Of course, extended but obviously necessary regulations will come at the cost of higher operation expansions.
By analyzing recent disasters, it becomes clear that the industry needs to adapt enhanced lifecycle risk management to avoid long-term damage by higher regulation standards and to maximize returns. Every further oil spill is hurting all vendors, as it leads to a further increase in the current administrative burden.
What regulatory risk management cultures exist?
The two major regulatory risk management cultures are performance based and prescriptive risk management. However, it should not be forgotten that the offshore industry is facing more than 40 different regulations in total. The differences between the two regulatory cultures are vast. The prescriptive one, which is mainly used in the US, utilizes a set of fixed standards to “prescribe” minimum levels of safety measurements.
Minimum requirements oppose the smallest burden on the industry (in a short-term example), as they soon become a minimum standard. In addition, the very slow legislative adoption of technical developments is making the concept vulnerable, as it leads to requirements that are years behind the actual state of technology. In the long run (despite the fact that we will all be dead, as JM Keynes pointed out) this is leading to a higher chance of more and larger disasters, and hence will extend administrative burdens even further.
The UK and Norway are using a performance based regulatory culture to avoid this weak spot. The performance based risk regulations use risk assessment and risk management. The main differences in the prescriptive system are the enhanced responsibility and engagement of the work force in management of safety assessments and work processes. In addition, the regulations are based on academic and industrial input and a third party is mandatory for technical approval.
Offshore SEMS audits must comply with the SEMS II Rule by June 4, 2015.
After observing the safety and environmental advantages, the USA started to swing slightly towards the direction of performance based regulations by releasing SEMS (2010) and SEMS II (2013), which are now binding and stand for “Safety and Environmental Management Systems”, formerly known as “Workplace Safety Rule”. The responsible agency is the American Bureau of Safety and Environmental Enforcement (BSEE).
So, what are the main changes SEMS and SEMS II regulations bring to risk management in the offshore industry? SEMS II:
•Stop work authority for all offshore industry personnel who witness an imminent risk or danger. -> Employees are entitled to abort an operation
•Clear definition of who has the ultimate work authority on a rig for operational safety and decision-making.
•Requiring an employee participation plan that provides an environment, which promotes participation by offshore industry employees as well as their management to eliminate or ease safety perils. -> Mandatory safety training for employees and contractors.
•Establishing guidelines for reporting unsafe working conditions directly to BSEE by field staff.
•Additional requirements for conducting a job safety analysis.
•Requiring that the team lead for an audit be independent and represent an accredited audit service provider -> Third Party. (Source: www.gpo.gov)
Offshore Industry Risk Management – SEMS I and BAST
While the newer SEMS II is mainly focusing on the work process, labor force involvement and a stronger regulatory environment through independent process audits, the former SEMS I, which is now incorporated, was primarily focusing on vessel management.
The important point of SEMS I are:
•Full work hazard analysis and facility-level risk assessment.
•Management of Change (including shift, management, contractor changes).
•Preventive (Planned) Maintenance and QMS.
•Emergency response (e.g. evacuation plans - validated by drills).
•Written-down processes for work force training and audits.
SEMS and BAST will bring high implementation cost for the industry and require a high level of organizational effort to keep up with the standards. In particular, the vast documentation demands of work processes and the expanded power of field personnel, safety audits, training methods and evacuation reactions, plans and efforts beg for the implementation of an audit proof documentation system.
The future may reveal just how hard the third party audits will be carried out. For now, the only thing certain is that there will be new problems and new tasks for (overworked) management and supervisors.
Software might be one of the smart ways to lessen the impact of the new regulations such as the compulsory preventive maintenance. An Excel sheet might not satisfy the auditing personnel, as shipping companies during the first IMO class audits had to discover. Instead, ship management software are calculating maintenance jobs ahead and provide legal proof regarding preventive maintenance.
BAST – Best Available and Safest Technology
The new proposed rule (by the Bureau of Safety and Environmental Enforcement) is reanimating a not-so-new concept with the main goal of using the best available measurements to protect workers and the environment – progressively using the most advanced technology. However, operators would not determine what is economically reasonable; rather, the BSEE would.
On the positive side of BAST, the maritime industry might experience a rain of money as actors in the offshore scene need to renew machines, buy additional monitoring tools, forecast equipment and the latest technology, which then enables condition-based maintenance. While having to pay for the technological leap, the offshore industry might soon discover that this is leading to lower labor work costs and better working performance. Nevertheless, the cost of change would be tremendous.
To tackle such concerns Doug Morris, BSEE Chief of Offshore Regulatory Programs, stated on February 18, 2014: “It is important to note that the designation of technology as BAST will not automatically render existing technology as obsolete, or require replacement.” (Source: www.bsee.gov/BSEEBlog/)
No matter how the new BAST regulation might look in detail, it is bringing an additional member into the game, as it can be safely assured that the manufacturers of marine equipment and maritime service providers have a strong interest in tight regulations, which subsequently lead to new business and enables them to sell high-class technology systems.
Even CODie.com, as software developer, would indirectly profit, as we can provide systems that make it possible to organize and bring alive the enhanced regulations of BAST, SEMS and SEMS II. The offshore industry should prepare well for the first audits to come – no one likes to be made an example of.
Further reads for those interested:
Ship & Offshore 1/2015, “Offshore Industry needs to responds to regulation”
Best Available and Safest Technologies for Offshore Oil and Gas Operations “Options for Implementation (2013)”: http://www.nap.edu/openbook.php?record_id=18545&page=39
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Unternehmensinformation / Kurzprofil:
CODie software product is a Germany based IT company, producing maritime software for the offshore industry and for shipping companies.
Dipl.-Ing. Andreas Bargfried
CODie software products e.K.
Zeppelinstraße 47 A
14471 Potsdam
Tel: +49 (0) 700 26343 835
Mail: info(at)codie.com
Datum: 21.07.2015 - 13:24 Uhr
Sprache: Deutsch
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contact information:
Contact person: Rene Jahncke
Town:
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Phone: +49 (0) 700 26343 835
Kategorie:
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Typ of Press Release: Erfolgsprojekt
type of sending: Veröffentlichung
Date of sending: 23.07.2015
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