Safer is better business

Despite being ultimately responsible for plant safety, board members and senior management often treat chemical-site safety as being of secondary importance to financial matters. This, say experts, leads to an over-reliance on engineers and technicians to ensure that effective procedures are followed.

As Dr Andrew Fowler, operations director of HFL Risk Services, puts it, unless a company has actually suffered the effects of a major accident, the main focus in board meetings generally remains firmly on financial matters, with plant safety often much further down the agenda.

“The fact is that plant safety and company profitability are actually very closely linked,” said Fowler. “Major accidents in high-hazard industries can be extremely costly, with forced downtime, compensation claims, fines, clean-up costs, rebuilding expenses, damage to reputation and, in worst-case scenarios, loss of life.”

Under the Corporate Manslaughter and Corporate Homicide Act 2007, courts have power to prosecute companies rather than individuals in fatality cases, where it is deemed that an organisation’s conduct in respect of health and safety matters has fallen far below what could have been expected in terms of duty of care.

Moreover, notes Fowler, employers in high-hazard industries are increasingly being called upon to demonstrate organisational competence in process safety management (PSM). This, he explains, means having a working knowledge and clear policy on PSM throughout the organisation, but, importantly, led from the top.

Adopting a reactive approach to compliance in these instances will undoubtedly lead to gaps in the PSM programme, and greater exposure to potential loss

And as Phil Scott, safety and risk policy manager at the Chemical Industries Association, explains: “Businesses managing major hazard potential have to appreciate that the hazardous substances they store represent their highest business risks, and need to be sure they have effective systems to manage those risks.”

Despite this, results from the first-ever PSM benchmarking exercise for the chemical industry revealed a high reliance on technical staff to know what needs to be done to implement and maintain plant safety.

The benchmarking study carried out by HFL with the support of the CIA, HSE and the National Skills Academy for the Process Industries found a disconnect between those responsible for setting policy and those responsible for carrying it out. This divide, noted Fowler, was identified following the Buncefield accident, when the HSE investigation board made its recommendations concerning policy, monitoring and review.

“While it’s essential that competent personnel are charged with process safety, experience has shown that, if not properly directed, this often leads to reactive compliance, meaning that company resources are not necessarily targeted to best effect,” said the HFL expert.

“Since it is senior management and board directors who ultimately approve the finance for the implementation of changes and initiatives to underpin safety, it makes sense that they understand how hazards and risks are identified and assessed,” he added.

“Management needs to be aware that just because some aspect of safety management has been deemed a ’hot topic’, honing in on one area may not be the most cost-effective way of driving down overall risk.”

Installations deemed high hazard must clearly comply with a number of regulations, codes and standards, designed to prevent or mitigate the outcomes of major accidents. However, we also need to look at situations where current codes and standards have less relevance, Fowler continued. This, he said, is especially the case where, due to circumstance and necessity, plant is being pushed well beyond its intended life and yet the design standards have been superseded and the design intent has been lost with the passage of time.

“Adopting a reactive approach to compliance in these instances will undoubtedly lead to gaps in the PSM programme and a greater exposure to potential loss,” the HFL expert said. “When senior management take a more active role in process safety policy, they find that far from it being a time and resource-sapping exercise, it can in actual fact save the company money.”

Identification of assets, plant and processes that are both critical to site safety and the business as a whole is an essential first step in managing process safety. A detailed review of potential loss of containment events will then help identify risk control (management) systems that are essential for ongoing safe operation and maintenance.

KPIs designed to detect failures within these systems can then be put in place to provide directors and senior managers with the assurances they need to remain confident that the business’s statutory and moral obligations will continue to be met.

But if the board and senior management are to truly realise their PSM aims and objectives, there needs to be a positive process safety culture throughout the organisation. This, said Fowler, means process safety leadership from the top, with senior management having a thorough understanding and committed role in the development of PSM policy and its deployment.

For Sarah Grindrod of business improvement firm Picme, PSM policy deployment offers a structure or framework within which to work: formalising the way in which things should be done and eliminating reliance on people’s experience.

Effective policy deployment, she argues, also means that progress towards goals is formally monitored in a visual environment. It aids sustainability and, from a legal point of view, helps demonstrate compliance to the relevant authorities.

“Like financial targets, policy deployment provides a shared vision, which aids long-term strategic planning and gives focus to the entire organisation. It also provides alignment, involvement and cross-functional team working and ensures resources are directed where they are most needed,” Grindrod concluded.