BP 2011 Annual Report Download - page 67

Business review: BP in more depth
BP Annual Report and Form 20-F 2011 65
Business review
Safety
Over the past year, we have been developing and implementing a wide-
ranging programme to further enhance safety, risk management and
compliance across BP. This programme was initiated in response to the
Deepwater Horizon incident in the Gulf of Mexico in April 2010.
The programme emphasizes the continuing importance of personal
and process safety within BP. Process safety involves applying good design
principles, along with robust engineering, operating and maintenance
practices, to managing operations safely. For BP, this means the plant
is designed, maintained and operated properly to avoid failures such as
spills or explosions that can result in injuries to people and impacts to
the environment. It also means that employees and contractors have the
appropriate training and competencies to carry out work, as well as observing
applicable procedures and policies that help to prevent personal injury.
In 2011, BP reported two workforce fatalities, and we regret the
loss of these lives. One was a rail-related fatality in the US, the other died
as a result of an unauthorized transfer of fuel in South Africa.
Safety and operational risk
Safety management
Our safety and risk management approach is built on deep experience in
the oil and gas industry. This includes learning from the recommendations
of investigations into the Deepwater Horizon oil spill in 2010 and the Texas
City refinery explosion in 2005, as well as operations audits, annual risk
reviews, other incident investigations and from industry practice of sharing
experience.
There are three key principles which we intend to be at the heart of
our approach:
• Leadership fostering a culture where everyone is focused on safety, on
managing and reducing risk and on safe, reliable and compliant
operations.
• Our operating management system (OMS) being the way BP seeks to
operate.
• Effective checks and balances independent of the business line and self-
verification being carried out at all levels of the organization.
While we maintain our focus on processes, practices and protocols, we
also place great emphasis on how our workforce applies them, thereby
working to strengthen safety culture and workforce capability.
A dedicated function
We established the safety and operational risk (S&OR) function in early
2011. S&OR supports the business line in delivering safe, reliable and
compliant operations across the group’s operated businesses. It does this
in four ways:
• It sets and updates the requirements, including those in OMS, that are
used across the business for safety and operational risk management.
• It provides expert scrutiny of safety and operational risk, independent of
line managers – advising, examining and providing assurance about what
our operations do.
• It provides deep technical expertise to the operations.
• It has the authority to intervene and escalate issues to cause corrective
action to be taken.
S&OR, as of the end of 2011, was made up of a central team of around
300, as well as nearly 300 more who are deployed in BP’s businesses,
providing guidance and scrutiny and examining how safety and operating
risks are being assessed and managed on oil and gas production and
drilling rigs, at refineries and across all our operations. The head of S&OR
reports directly to the group chief executive.
The central team serves as the custodian of group requirements,
runs safety and operational risk audit and capability programmes and
endorses the appointment of individuals for designated safety-critical
roles. The central team includes some of BP’s top engineers and safety
specialists, several of whom have experience of other industries where
major hazards have to be managed, including the military, nuclear energy
and space exploration.
Our deployed S&OR teams work with our operating businesses – ranging
from upstream oil and gas development and production to refineries,
petrochemicals plants and retail networks. They help the businesses apply
our standards to their operations and they help provide assurance to the
group on how operational risks are being managed, business by business.
Operating businesses remain accountable for delivering safe,
reliable and compliant operations. They have the responsibility of managing
risks and bringing together people with the right skills and competencies.
Working in collaboration with deployed S&OR subject specialists for
guidance, they are subject to new levels of independent scrutiny and
assurance.
Governance
BP reviews risks at all levels of the organization, with our S&OR function
providing an independent view of safety and operational risk. While line
managers are responsible for identifying and managing risks, we place
strong emphasis on checks and balances, including both enhanced self-
verification by individual BP operations – such as drilling rigs or refineries
– and independent assurance by the S&OR function.
The board’s safety, ethics and environment assurance committee
(SEEAC) receives updates from the group chief executive and the head
of S&OR on the work of the group operations risk committee (GORC), on
BP’s performance in process and personal safety, and our monitoring of
major incidents and near misses across the group. Where appropriate other
senior managers will attend to provide briefings on safety, environmental
and operational integrity in their areas of responsibility. SEEAC also
receives information from the Independent Expert appointed to monitor
the implementation of recommendations made by the BP US Refineries
Independent Safety Review Panel following the 2005 explosion at our
Texas City refinery. See Board performance report on pages 120-133 for
further information on the activities of the board’s committees, including
SEEAC and the Gulf of Mexico committee.
Lessons learned from major incidents are being incorporated
into our operating management system and capability development
programmes.
Operating management system
Launched in 2008, our operating management system (OMS) serves as
our group-wide framework designed to drive a rigorous and systematic
approach to safety, risk management, and operational integrity across the
group. OMS integrates requirements regarding health, safety, security,
environment, social responsibility and operational reliability, as well
as related issues such as maintenance, contractor management and
organizational learning, into a common system.
The principles and standards of OMS are supported by detailed
group-wide practices, as well as other technical guidance materials.
The goal of OMS is to apply certain standards, group-defined practices
and group engineering technical practices on a group-wide basis in our
operations; these include, among others, the practices on assessment,
prioritization and management of risk; incident investigation; integrity
management; and environmental and social requirements for major
new projects.
Following the principle of continuous improvement, our OMS
evolves over time, for example to reflect implementation experience as
well as learnings from incident investigations, audits and risk assessments,
and by strengthening mandatory practices.
Transitioning to OMS
The transition to OMS requires operations to develop a local OMS that
describes how the operation addresses site-specific local operating risks,
applies group standards and practices and manages compliance with
applicable health, safety, security and environment legal requirements.
As part of the transition, operations conduct a gap assessment against
defined aspects of OMS and their local processes and procedures, and
then develop a prioritized gap-closure plan. To formally transition to the
system, operations issue a local OMS handbook for the workforce to
follow, and complete a management-of-change document that details
the changes involved.