One side note from BSEE’s recent announcement on the SEMS audit deadline – We now have a clearer idea of how many offshore operators there actually are in U.S. federal waters. When the Safety and Environmental Management System (SEMS) rule first came out in 2010, the government said there were 130 operators of oil and gas facilities on the Outer Continental Shelf. However, in the complex world of oil and gas partnerships and idle iron, that was just a guesstimate.
Then on November 20th, BSEE announced that it was citing 12 offshore operators for failing to submit a completed SEMS audit. Buried in that announcement was a statement that “Eighty-four operators were subject to the Nov. 15, audit deadline,” meaning that, at least in the government’s eyes, 84 operators have at least one offshore facility that holds a BSEE lease of right-of-way. Of course, since many of the 12 operators cited are trying to finish decommissioning projects to leave the gulf, the number may be closer to 72. A 45% drop from 130 to 72 is pretty significant.
Why is this important? It shows that the number of small independents continues to drop (and perhaps that the requirements of SEMS may be one reason).
If you are a contractor, you can expect a lot of activity on the SEMS front in 2014:
Operators will be making changes in their plans to address deficiencies in their audits;
SEMS II changes are heading our way; and
You can anticipate more pressure to prove personnel have the skills and knowledge to work safely offshore.
Our half-day SEMS workshop for contractors focuses on all of these issues. The next workshop will be held Friday, December 6th, in Lafayette, LA. We expect a good turnout, but seats are still available. To register or read more about it, click here.
Over the past month, this blog has looked at the SEMS requirement for operators to evaluate the skills and knowledge of contractor personnel. It is one of the bigger challenges in the offshore safety regulations because operators usually don’t know what it takes to be competent at every offshore job and most contractors don’t know how to prove competency, even when their workers are very safe and capable.
Then a couple of days ago I had a conversation that just crystalized the issue. An operator told me, “I ask a contractor to prove a worker has the skills and knowledge to work under SEMS and I get a stack of certificates and class rosters, but none of it tells me what I need to know. I want one piece of paper that says, ‘this guy knows how to do his job.’”
We think we have a solution. Lifeline Strategies and OQSG, a leader in evaluating the competency of pipeline workers, have teamed up to create SEMSReady™, a skills and knowledge verification system that:
Teaches contractors how to create and manage a skills and knowledge plan (SKV plan) for workers;
Teaches qualified subject matter experts how to perform evaluations that are accurate and objective; and
Provides follow-on services for companies that need additional help developing their SKV plans and managing the information in a database.
The SEMSReady™ approach gives operators a tool to assess the way a contractor meets the skills and knowledge requirements of SEMS and then to verify that the workers have been evaluated on those skills. It gives contractors a structured way to develop an internal competency plan that can be documented and audited to meet operator requirements. The process also allows contractors to prove to auditors that their evaluators are qualified to perform those verifications. Given the number of places that SEMS requires operators to verify contractors on the job performance, we think this sort of approach may be the only way to meet the regulations.
You can learn more about the SEMSReady™ approach here. The first classes are scheduled for:
The deadline for the first round of SEMS audits was Friday, a date which was celebrated by…nobody. So what does BSEE, the agency that required the audits in the first place, do with the results?
Just one guy’s opinion, but I wish BSEE would to the following:
1. Tell us how many oil and gas operators there are in offshore U.S. waters, based on the ones that turned in audits. Sounds like a simple piece of information but I don’t think anyone really knows. The SEMS rule estimated there were 160, but, given how many offshore facilities are shut-in, that was a guess.
2. Related to that, operators had to give BSEE a company contact when SEMS when into effect. Compare that to the number of audits turned in and tell us how many operators have exited the Gulf of Mexico since the rule went into effect. We know it has happened; let’s quantify it.
3. Scrub the names of the companies from the audit reports and let us know the general results. SEMS is about continuous improvement. Let’s start with the lessons learned from the audits. Rent a very large room. Invite operators and contractors alike and do a “hot-wash” of what has worked and what hasn’t.
4. Issue a Notice to Lessees that clarifies BSEE’s expectations on audits and what the agency’s role will be in future audits. One of the biggest complaints you hear about the audits is over the inconsistencies among audit providers. It is also time BSEE explained whether its job is to audit SEMS plans or to audit auditors.
That’s what is on my wish list. I have made my own study of the types of discrepancies the different auditors found and those lessons learned are a large part of my SEMS workshops and consulting with contractors. But it would be good if BSEE would share its information with industry.
From time to time, I would like to use this blog look at the different elements of the Safety and Environmental Management System (SEMS) rule and to focus on how they are being put into practice. The first section, named General Provisions, is more commonly referred to as the Management Section. It is where the company commits the people, time and other resources to put the plan into place, but it serves a more important function – When management cares, things get done and if management doesn’t care, nobody cares.
Looking at the oil and gas companies, which have to develop the SEMS plans, management involvement is what tells company employees and contractors that they need to follow the plan and not take shortcuts. This was driven home the other day in a conversation with Greg Gordillo of Bureau Veritas, one of the approved third-party SEMS auditing bodies. He said that there was a direct relationship between management’s involvement in pre- and post-audit meetings and the number of areas for improvement found by the audit team. Reading between the lines, management’s commitment to making the plan work and to safety in general shouldn’t start the day it receives the final audit report. It needs to be ongoing and visible.
How does that impact contractors? I recently had the chance to sit in with Chris Kuiper, President at Environmental Health & Safety, as he audited an offshore contractor for a major oil company. I was surprised at how many of his questions focused on upper management buy-in. As we walked through the different pieces of the company’s safety program, time and time again, Chris wanted to know how involved management (in fact the owner) had been in making changes or reviewing policies. At one point, he asked if the owner attended safety meeting and how actively he participated. As it happened, the owner of this company had been the safety manager early in his career and was very hands-on.
It was very clear that, as operators come to understand how much management commitment SEMS requires, they are looking for the same commitment from the owners and upper management of contractors before they put them to work offshore. If some contractors are not already seeing this when their customers come to audit, they will as this sea change takes hold.
And that makes sense. Many believe that SEMS won’t be fully effective until there is a shift in the safety culture offshore. They are right. Safety culture begins at the top.
We held a very successful workshop last week in Houston to help contractors understand SEMS. The next one is scheduled for Friday, December 6th in Lafayette, LA. You can learn more and register here.
This workshop lasts four hours and we cover:
Each of the 13 SEMS elements from a contractor’s point of view
The early lessons learned from the first round of SEMS audits
What you need to know to prepare for the new requirements in SEMS II.
What makes these workshops unique is that they are focused on the contractor’s perspective. Now that the first round of audits are behind them, operators will be taking a hard look at some specific areas of SEMS. Knowing those areas and what the operators are looking for will help keep you in compliance. BSEE’s new push to INC contractors just adds to the importance of staying on top of SEMS.
These workshops are a very simple way to make sure your operations and sales staff understand the new requirements.
A quick update on the Coast Guard’s proposal to require SEMS plans for vessels that work in the offshore oil and gas industry. The deadline to comment was originally set for December 9, but at the request of industry, the Coast Guard has now extended that deadline to January 23, 2014. However, there is still no plan to hold any kind of public hearing on the proposal. You can read the original Advanced Notice of Proposed Rulemaking here. The notice of the extension can be found here.
On November 8, OSHA published a proposed rule that would require many, if not most, employers to submit their injury and illness reports electronically. The agency intends to post that information online.
The proposal has three elements:
Companies with 250 or more employees would be required to submit their data for injuries, illnesses and fatalities every quarter.
Companies with 20 or more employees need to submit the information from their OSHA 300A form every year if they are part of an industry that is identified in the rulemaking as having incidents above a certain threshold.
OSHA may also tell individual companies to submit specific information to OSHA.
Talk about a game changer! Even though employers are already required to post this information where employees can see it, putting incident information online where the whole world can see it is opens up a lot of new issues. Suddenly a company’s safety record becomes part of the public debate over siting facilities, the relative safety of the industry and the image of the company itself. Every company must be prepared to publicly defend its record in an environment where any incident is too many incidents.
Of course, whether the government says it or not, that is part of the objective here. There is a famous quote from Supreme Court Justice Brandeis: “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants.” OSHA clearly believes that public disclosure will be an incentive to reduce incidents.
For some companies this could be helpful. If perspective employees start looking at incident rates when deciding where to work or customers gravitate to suppliers and contractors based on their public records, it could be a positive for companies that invest in their safety records and a stigma for those that don’t.
One interesting note – The proposed regulation lists the small employers (by NAICS code) that are required to file their annual OSHA 300A form electronically. Oil and gas companies and oil and gas service companies are not included on the list. However, that does not mean small companies in the energy sector are off the hook. Many are listed under the NAICS code as being part of other industries, such as construction. Also, OSHA has given itself the ability to target specific companies or sectors to report electronically.
This is still a proposed rule, so the public has a chance to comment. Comments are due by February 6, 2014. OSHA held public hearings on an earlier version of the proposal and it doesn’t look like it will hold others.
What do you think of this proposal – positive or negative?
The focus of this blog has been safety, but with Veterans Day coming up, I want to use this one to talk about my father-in-law. Roscoe flew 33 missions as a B-17 navigator in World War II. On Tuesday he took one more flight, this time as one of 70 veterans who flew to Washington, DC, as part of the Honor Flight program. Over the last three years, the group that organizes the flights that leave from Mississippi has taken nearly 600 vets to DC where they tour WWII memorial, the tomb of the unknowns and the Iwo Jima memorial, among other sites. There are other Honor Flight groups that have taken vets from other parts of the country
It is a moving and fitting honor for these men and women. Roscoe called it one of the best moments of his life.
We should also honor the people who make these flights happen, including the volunteers who organize what amounts to a very old and a little bit creaky army on the move and the donors who have stepped up to fund the flights. And we should recognize the hundreds of people who show up in Washington to greet the vets and who line the corridors of the Gulfport-Biloxi airport to welcome them home again. Most of these people don’t know any of the vets on the trip. They just come to show respect.
And then there is my wife, who was so determined to make sure that Roscoe was healthy and ready to make the flight, I think she would have flown the plane if she needed to.
The deadline is December 9th for industry and the public to comment on a Coast Guard proposal to create a SEMS rule for vessels that work in the oil and gas industry. At last check, there were only five comments on the public docket, almost all of them against the proposal (and at least one of them not for polite company).
This is an Advanced Notice of Public Rulemaking, meaning the Coast Guard will still need to go through more steps if it really wants to require SEMS on offshore vessels like MODUs, OSVs, liftboats, crewboats and construction vessels. However, many in industry believe there will eventually be some kind of SEMS regulation for vessels. For boats that already have International Safety Management (ISM) plans, the simplest solution would be an appendix that adds the parts that are in SEMS but not ISM. For them the worst case scenario would be if they had to adopt ISM and SEMS as two separate plans.
Domestic service vessels that do not have ISM have much more to worry about. Without any safety management system, they would have a hard time bridging to SEMS. We are advising clients and working with them to develop a safety management system internally so they are prepared if the Coast Guard moves forward with a SEMS approach.
You can (and should) read the Coast Guard proposal here. The Coast Guard says it may affect 2200 vessels.
In the meantime, there is another Coast Guard proposal out that is a bit of a mystery. On October 25th, the Coast Guard sent a proposal to the White House for review titled Training of Personnel and Manning on Mobile Offshore Units and Offshore Supply Vessels Engaged in U.S. Outer Continental Shelf Activities. However, there was no explanation of what that might cover or when the Coast Guard hopes to have it out.
If your company needs help creating a safety management system, contact us.