Contractor SEMS Plans – Coming Soon/Not Here Yet

Logo & SEMS IIThe Center for Offshore Safety (COS) finished its third annual forum this past week.   As always it was a valuable event to gauge where the industry is on implementing the Safety and Environmental Management Systems (SEMS) rule.  One of the most prominent issues during the sessions was whether Contractors should have SEMS plans, which are currently only required for Operators.

The clear message was that operators would like their service companies to have SEMS plans that match up with their own plans and that they are ready to push for that to happen.  It is less clear how soon and under what conditions.

How is pushing for it?   The COS, which generally represents the largest Operators and Contractors, has two different committees working on the framework for a Contractor SEMS plan.  The first is looking at the audit protocols that would be used to measure a Contractor SEMS.  The second is looking at how it would be implemented. For example, would all Contractors be required to have a SEMS and would they all have to go through a COS-sanctioned audit?   Additionally, a separate industry group is rewriting the API RP 75 requirements that are the basis for the SEMS rule.  That group is leaning towards applying the RP 75 rule to Operators, Contractors and Subcontractors.   That makes it likely that Contractors (and possibly their subs) would need SEMS plans.

On a separate track, the Coast Guard is studying whether vessels should have SEMS plans.  BSEE has made it clear it thinks Contractors should have SEMS plans, but appears to be holding back on a requirement to see if industry does it voluntarily.

What would a Contractor SEMS look like?  At this point, two Contractors have voluntarily gone through a SEMS audit under the COS guidelines for Operators.   Schlumberger and Pacific Drilling followed the regulatory requirements for an Operator SEMS closely and simply adapted the parts that didn’t directly apply.

What are the sticking points?  One issue is what the plans would look like, but that appears to be a minor point.  Most of the elements of SEMS apply easily to Contractors, such as JSAs and Safe Work Practices.  Some parts would not apply, such as mechanical integrity for a Contractor that doesn’t take equipment offshore, and those could simply be left out of the plan.

The larger issue is how Operators would view a Contractor audit.   Some Contractors say the process simply shifts the audit costs from the Operator to them.  They say it only has value if the Operators agree to accept one universal audit.  Currently, they may have to undergo repeated audits from multiple Operators.

Cost is an issue.  For a large Contractor, the cost of a full  COS-approved audit may be reasonable, but smaller Contractors or ones that work in several industries may find the audit to be cost-prohibitive.   COS members are still wrestling with this and it may take a while to resolve.

What about other Operators?   COS represents about a dozen offshore oil and gas Operators, although they are some of the largest in the Gulf.  That leaves more than 60 other operators that are not in COS.  Most, but not all, of those would probably welcome a shared audit, partially because it takes much of the responsibility for audits off their shoulders and partially because it would represent an industry consensus on how compliance should be monitored.  However, how much faith they would put in a shared audit is still to be resolved.

What should Contractors do right now?   On the one hand, there is no immediate mandate for a Contractor to adopt a SEMS plan.  On the other hand, there are very good reasons why they should.  The first is that the requirement is clearly coming and experience has shown that it takes a year or two for a SEMS plan to fully take hold.  Starting now would help ensure that the company is ready.  The second reason is that the customer is starting to expect it.  None of these discussions are happening in a vacuum.  If there is a decision to require Contractor SEMS audits in a year or two, customers are going to start pushing for the framework soon.  It also makes good commercial sense at a time when Operators are paring down their Contractor lists.

If you need help developing a SEMS plan or performing the gap analysis to know how much work it would take to develop a SEMs plan, contact us at Lifeline Strategies.  We are here to help!

Video Lesson: Don’t Violate in Front of A Lawyer’s Window!

worker on scaffoldWhen New York Plaintiff’s Attorney John O’Gara looked out his window and saw workers on the next building working at heights without fall protection, he reached for his smartphone and videoed it.  Then he called the media.

You can see the result here.

In the video O’Gara shot, workers appear to be constructing the scaffolding, guardrails aren’t in place and and the workers do not appear to be wearing harnesses or tie offs.   Clearly, that could be a violation and should be investigated.

What makes this one stand out is that it happened just outside a lawyer’s window and would up captured forever on video.  It is a reminder that we live in a new age and every potential violation of a law or regulation can wind up out there for everyone to see.

Companies have have cutting corners on safety for a long, long time, but now  we live in an age where every person who walks by a worksite has a phone camera in his or her pocket.  The rules have changed.   Everything is visible, from passenger videos of cruise ships tossing garbage overboard to lawyer videos of construction sit practices.

The reasons for compliance are already strong.  It protect workers.   It keeps companies out of legal trouble.   But if that is not enough, managers need to remember this one:  The whole world is watching!

 

Oilfield Fatalities Jump 17% in 2014

The Bureau of Labor statistics has released its workplace fatalities in U.S. workplaces for 2014.  While the overall number of worker fatalities edged up by about two percent, deaths in the category known as oil and gas extraction jumped by 27%.   Jump was from 112 in 2013 to 142 in 2014.  This has a number of implications:

Balancing Budgets and Safety – The reality of the collapse in oil prices is that companies need to cut costs anywhere they can.   Safety can be an appealing target; it is a cost center and it is hard at times to determine how some safety expenses translate directly to reductions in incidents.  It is tempting to reduce the safety staff, audits or training.  But the new fatality numbers are a clear indication that this is no time to cut too deeply in the safety department. No one wants to explain to an investigator why they chose to cut corners right before a serious incident.


The answer is not to find cost-effective safety solutions.   If you need help with compliance or in applying cost-effective approaches, contact us at Lifeline Strategies.    


 

Enforcement and Regulation – Anyone who wonders why OSHA and other agencies are focusing their attention on oil and gas needs only to look at the fatality numbers.  No government agency involved in safety can ignore an increase from one industry of that magnitude, but when the agency is as aggressive about addressing workplace incidents as the current OSHA leadership, the industry will find itself in a spotlight.  Oil and gas has seen stepped up inspections and high profile fines.   Just last week the National Institute for Occupational Safety and Health (NIOSH) announced a three year study of oilfield safety.   The key point is that the increased attention is warranted in the minds of regulators and, until industry finds a way to address fatalities, the regulators are not going away.

The Oil Slowdown and Fatalities – Given the cutback in activity, man-hours worked should plummet for 2015.  Theoretically, fewer hours worked will mean less opportunistic risk and fewer fatalities.   The indication so far has been that, as companies layoff workers, the experience and skill-level of the remaining workforce is pretty high (see article about this here) and there does not seem to be a drop off in safety.    The problem is that, if fatalities go down a moderate amount and hours worked go down a lot, the fatality rate based on man-hours could jump up.   That means an improvement may still look bad on paper.   We might expect fatalities to shift from drilling-related activities(which is dropping) to production-related activities (which has increased in some cases as operators try to squeeze out more production).

Smaller Players Will Be Under More Scrutiny – The building blocks of improved safety haven’t changed – training, following safety rules under supervision, contractor oversight, etc.  Small operators do not have the resources of larger operators and, working under slim margins, may cut corners.  Many of the incidents in the last year have involved smaller service companies and that is well understood by OSHA.

A final note – The 2014 stats also focus attention on contractors involved in fatal accidents.  OSHA has had a big push in recent months to clamp down on contractor incidents, including policy changes, speeches and regulatory changes.  According to the figures from BLS, contractor deaths increased from 749 deaths in 2013 to 797 deaths in 2014.  The statistics also say that 19 percent of contractors who died were working for the government, second only to the percentage working for the construction industry.  So the question is, if OSHA is so serious about protecting contractors, what is it doing to protect government contractors?

Regulations Can’t Fix Stupid, But New Fall Protection Rules On the Way

ladder failRegulations probably wouldn’t help these two, but it is a good reminder that the rules governing slips, trips and falls protection are in their final review.   OSHA launched the extensive re-write of the Walking Working Surfaces and Personal Fall Protection Systems regulations way back in 1990 and has been trying to come up with the final product ever since.

The final rule went to the White House for review in July. Under the process, the review by the office of Management and Budget is supposed to be limited and relatively short, but it is not uncommon for a particularly controversial regulation to sit in review until the White House decides the political timing is right.

What’s in the new rule?  Hard to say.  The last public proposal came out in 2010 and sparked a good deal of public comment.  The proposal weighed in at nearly 200 pages and the estimated cost to industry for compliance was around $175-million.

By the way this picture comes from the Navy Safety Center’s website, which is a very good source for pictures of safety Darwinism.

First of Its Kind Federal Study Targets Oil and Gas Worker Safety

Early next year, researchers will fan out to well sites, loading yards, man camps and anywhere else they believe they can find oil and gas workers to ask them about safety.  It is a first of its kind study that is being launched by the National Institute for Occupational Safety and Health (NIOSH), according to an article in the Denver Post.  The federal government plans to spend three years surveying and studying the industry to get a handle on worker injuries.

The government is concerned at the high rate of injuries and fatalities on the oil and gas work sites.  Officials say the incident rate for oil and gas is seven times higher than the rest of U.S. industry.  According to the report, researchers will try to get at the heart of the problem by asking workers “about the types of injuries they’ve suffered while on the job, what they were doing when they were injured, the training they’ve had and whether oil companies provide bonuses to workers who don’t report an injury or incident over a certain length of time.”

What will come out of the study?  Nothing in the short-term.  As noted above, the government says it will take three years to survey industry and study the data.   After that, OSHA may use the results to work with industry to hone in on problem areas or it could be used to prompt legislation and changes to regulations.   It is significant that the study will have a heightened focus on transportation, both worker and trucking.

Trench Collapse: Viral Video of OSHA Inspector’s Just-In-Time Visit

OSHA saves a lot of lives, but agency inspectors rarely save lives while doing an actual inspection.   A video, which is now going viral, shows an inspector from the Oregon State OSHA agency performing an inspection on a road crew worksite.    The trench is not properly shored and, just as inspector Tim Marcum is telling a worker he can’t stay in the space, the ground around the trench collapses.

The video drives home why the OSHA regulations are in place and why they need to be followed on every job.   This one belongs in every safety library:

New Class – SEMS for Offshore Workers

Logo & SEMS IIProblem: SEMS requires that offshore workers be trained in more than 15 different topics.  Operators say awareness level orientations, while important, don’t meet the standard for “training.”   Making matters worse, many of the required topics aren’t clearly defined.  Companies are forced to evaluate and send workers to several different courses, adding time and expense.

Solution: Lifeline Strategies is offering a one-day class that trains offshore personnel on a dozen key SEMS requirements and prepares them to work under operator and government requirements.   For example, the class doesn’t just teach workers how to perform JSAs and Stop Work Authority; it teaches them the way they need to be performed under SEMS.

The class can also be modified to include your company-specific policies and procedures for requirements like Operating Procedures and Management of Change.

We are scheduling classes now.  For more information contact SEMS@Lifelinestrategies.com.