Engaging contractors: Partnership approaches to improving safety in the power industry

Transcription

1 Engaging contractors: Partnership approaches to improving safety in the power industry

2 ENGAGING CONTRACTORS: PARTNERSHIP APPROACHES TO IMPROVING SAFETY IN THE POWER INDUSTRY 1st edition July 2014 Published by ENERGY INSTITUTE, LONDON The Energy Institute is a professional membership body incorporated by Royal Charter 2003 Registered charity number

3 The Energy Institute (EI) is the chartered professional membership body for the energy industry, supporting over individuals working in or studying energy and 250 energy companies worldwide. The EI provides learning and networking opportunities to support professional development, as well as professional recognition and technical and scientific knowledge resources on energy in all its forms and applications. The EI s purpose is to develop and disseminate knowledge, skills and good practice towards a safe, secure and sustainable energy system. In fulfilling this mission, the EI addresses the depth and breadth of the energy sector, from fuels and fuels distribution to health and safety, sustainability and the environment. It also informs policy by providing a platform for debate and scientifically-sound information on energy issues. The EI is licensed by: the Engineering Council to award Chartered, Incorporated and Engineering Technician status; the Science Council to award Chartered Scientist status, and the Society for the Environment to award Chartered Environmentalist status. It also offers its own Chartered Energy Engineer, Chartered Petroleum Engineer and Chartered Energy Manager titles. A registered charity, the EI serves society with independence, professionalism and a wealth of expertise in all energy matters. This publication has been produced as a result of work carried out within the Technical Team of the EI, funded by the EI s Technical Partners. The EI s Technical Work Programme provides industry with cost-effective, value-adding knowledge on key current and future issues affecting those operating in the energy sector, both in the UK and internationally. For further information, please visit The EI gratefully acknowledges the financial contributions towards the scientific and technical programme from the following companies BG Group Premier Oil BP Exploration Operating Co Ltd RWE npower BP Oil UK Ltd Saudi Aramco Centrica Scottish Power Chevron SGS ConocoPhillips Ltd Shell UK Oil Products Limited Dana Petroleum Shell U.K. Exploration and Production Ltd DONG Energy SSE EDF Energy Statkraft ENI Statoil E. ON UK Talisman Sinopec Energy UK Ltd ExxonMobil International Ltd Total E&P UK Limited International Power Total UK Limited Kuwait Petroleum International Ltd Tullow Maersk Oil North Sea UK Limited Valero Murco Petroleum Ltd Vattenfall Nexen Vitol Phillips 66 World Fuel Services However, it should be noted that the above organisations have not all been directly involved in the development of this publication, nor do they necessarily endorse its content. Copyright 2014 by the Energy Institute, London. The Energy Institute is a professional membership body incorporated by Royal Charter Registered charity number , England All rights reserved No part of this book may be reproduced by any means, or transmitted or translated into a machine language without the written permission of the publisher. ISBN Published by the Energy Institute The information contained in this publication is provided for general information purposes only. Whilst the Energy Institute and the contributors have applied reasonable care in developing this publication, no representations or warranties, express or implied, are made by the Energy Institute or any of the contributors concerning the applicability, suitability, accuracy or completeness of the information contained herein and the Energy Institute and the contributors accept no responsibility whatsoever for the use of this information. Neither the Energy Institute nor any of the contributors shall be liable in any way for any liability, loss, cost or damage incurred as a result of the receipt or use of the information contained herein. Electronic access to EI and IP publications is available via our website, Documents can be purchased online as downloadable pdfs or on an annual subscription for single users and companies. For more information, contact the EI Publications Team. e: pubs@energyinst.org

4 CONTENTS Page Foreword...5 Acknowledgements Introduction Contractual good practice Tendering good practices Selection and contract mobilisation good practice Post completion review Safety leadership Formal safety days and behavioural safety events Safety walks and safety reviews Formal safety meetings between client and contractor Leadership visibility and messaging Addressing process and occupational safety Process safety management system Risk management techniques Simultaneous operations (SIMOPs) High hazard operations and emergency response Occupational safety Working with sub-contractors Controlling sub-contract arrangements before they occur Targeted surveillance Thorough integration of planning and coordination Competence assurance Ensuring a competent tendering process Investigation of staff competency during tender and mobilisation Transient labour Contractor competency assurance once on site Raising internal contract management competence Real time oversight and performance coaching Management of change and variation instructions Key features of the MoC process Operational re-enforcement of the MoC process Engagement and communications mechanisms An environment for good communication Regular coordination and HSE meetings Engaging in safety conversations

5 Contents continued... Page 9 KPIs and performance management Leading and lagging safety indicators Incident and near miss reporting and investigation Incentives Performance reviews...50 Annexes Annex A UK health and safety law...51 A.1 The Health and Safety at Work Act (HSWA)...51 A.2 Management of health and safety at work regulations A.3 The construction (design and management) regulations A.4 The control of major accident hazards regulations...53 Annex B Definitions and abbreviations B.1 Definitions...54 B.2 Abbreviations and acronyms Annex C Safety cultural maturity Annex D Example KPIs Figures Figure 1 Main activities associated with each stage in the project life cycle...7 Figure 2 Key messages at each life cycle stage....8 Figure 3 Additional good practices across the five stages....8 Figure 4 Example of a bow-tie Figure C.1 Safety cultural maturity matrix...57 Figure C.2 Cultural maturity ladder (Source: Hudson & Parker) Tables Table D.1 Example of internal contractor KPIs

6 FOReWoRD This guide was developed in response to demand from operators and contractors within the UK power generation sector, recognising that the safe and effective engagement of contractor resources represents a substantial responsibility for everyone in the industry. The intent of this guide is not to comprehensively document all the relevant legislation and industrywide standard practices, but instead to focus on the greatest challenges whilst sharing existing or emerging good practice. Workshop-based discussions between members of the Energy Institute s (EI) Power Utilities Technical Committee (PUTC) and contractors highlighted the following priority areas where good practices are sought: safety leadership; addressing both occupational and process safety; working with sub-contractors; competence assurance; management of change and variation instructions; engagement and communications mechanisms, and key performance indicators (KPIs) and performance management. This work provides a risk-based view of good practice but does not seek to provide comprehensive end-to-end instruction. This publication focuses on power station outages, the associated contract works (and also service contracts), rather than major construction projects. The intended users include power generation companies and the contractors that provide services and resources within the power generation sector. However, it is likely that the contents may well have application across other power generation industries. Managing contractors: A guide for the energy industry, an earlier document produced by the EI in December 2006, addresses in detail many of the contractual elements that are summarised here. 5

7 ACKNOWLEDGEMENTS The EI wishes to acknowledge the support of the members of the Power Utility Technical Committee (PUTC) in the production of this guide: Derrick Farthing Dan Rawdin John Armstrong John Armstrong Sam Botterill Alan Dickson Euan Fenelon Steve Gilmore Phil Horner John Kinirons Dorian Matts Graham Orchard Konstantinos Vatopoulos E.ON (Founding Chair) SSE (Current Chair) E.ON GDF Suez Europe Energy Institute (Technical Manager) Scottish Power Scottish Power E.ON Centrica EDF RWE Npower RWE Npower Saudi Aramco The EI would also like to thank all those who participated in the industry workshop and subsequent interviews and survey. In particular the EI would like to thank E.ON UK for hosting the industry workshop. Contractors/consultants Cape Doosan Babcock Dekomte NOREC RE Field Services Siemens Knowles Mc Caulder Associates Oliver Wyman The EI wishes to record its appreciation of the work carried out by Susie Scott and Neil McCulloch (Oliver Wyman Ltd.), as principal authors. In addition the EI would like to thank Steve Worrell Doosan Babcock for acting as coordinator for the contracting organisations involved. 6

8 1 INTRODUCTION In December 2006, the EI published Managing contractors: A guide for the energy industry with the objective of moving towards a consistent and comprehensive approach to the management of contractors throughout the industry. It offered good practice guidance for promoting the health and safety of contractors with a particular focus on working with foreign nationals. In that guidance, the then-pertinent legislation was briefly outlined together with the obligations placed upon each party. While the legislative framework has evolved since its publication, it is worth reiterating the key messages offered in that earlier guidance, virtually all of which remains of enduring relevance and value. It is summarised in the following three figures. Concept & Feasibility Design & Planning Tender & Selection Construction Commissioning & Handover Maintenance Construction Project Describe the project Gather relevant information Identify personnel to be involved Complete project risk profile Review the maintenance plan Gather relevant information Identify personnel to be involved Review project risk profile Prepare the project design Devise a project methodology Allocate appropriate resources Specify management arrangement for the project Prepare a pre-tender H&S plan and a design risk assessment Prepare the project design Devise a project methodology Allocate appropriate resources Specify management arrangement for the project Prepare pre-tender H&S plan and a design risk assessment Preparation of the Contract Safety Plan Identify Contractors to be used Contractor vetting Update the HSE notification Begin preparation of the Health & Safety File Review & update of the Contract Safety Plan Identify Contractors to be used Contractor vetting Update the HSE notification Begin update of the Health & Safety File Fix contract safety plan Continue preparing H&S file Include project-specific risk assessments Induct contractors / staff Hold toolbox talks Run safety meeting cycle Monitor performance Fix contract safety plan Continue preparing H&S file Include project-specific risk assessments Induct contractors / staff Hold toolbox talks Run safety meeting cycle Monitor performance Complete H&S file Complete any tests and checks Bring project ˈon lineˈ Complete the Project Safety Review (PSR) Complete H&S file Complete any tests and checks Bring equipment back ˈon lineˈ Complete the PSR Figure 1: Main activities associated with each stage in the project life cycle 7

9 Concept & Feasibility Design & Planning Tender & Selection Construction Commissioning & Handover Involve the Project Coordinator as early as possible A good Project Coordinator ensures all communicate and cooperate Personnel must be both qualified and experienced Set tone early: Put safety at the top of the agenda Set clear safety objectives Identifying and designing out hazards can save costs Must ensure that all designers communicate Design risk assessment is a key skill, often done poorly. Must ensure competence Project risk assessment is essential to planning tasks effectively Keep HSE at top of the agenda Persons appointed to vet safety capabilities of potential suppliers must be suitably qualified and experienced Selection from a preapproved list then competence must be reviewed for suitability Must assess ability to work safely before any award Work must not start until a specific assessment of the risk has been done Safety is as much about what you do as what you say Communicate expectations clearly and often Make sure safety is important to the contractor s management team Encourage operators to participate and engage Ensure competence and monitor churn Contractors should realise that the findings of the Project Safety Review (PSR) will have a real impact on their status and standing for future custom Seek positive as well as negative lessons in the PSR Language Ensure language is not a barrier Familiarise those new to the UK with the law and its objectives Principal Contractor (PC) must understand UK legislation & objectives Safety plan must be made to ˈlive & breatheˈ Apply rules rigorously Language related risks must be considered and addressed within & between teams & contracts Staff must be effectively briefed on expectations Ensure PC knows all language barriers PC to profile language and plan accordingly Language must not be a barrier to managing risk Cultural impact: Red PSR should assess how language impacted, and how cultural differences have impacted Figure 2: Key messages at each life cycle stage Figure 2 highlights practices associated with employment of foreign companies and workers. Concept & Feasibility Design & Planning Tender & Selection Construction Commissioning & Handover Profile the risks (for future risk assessment) Review legacy materials for enduring relevance (things change, beware ) Make key appointments early and check credentials thoroughly Avoid staff churn Hold routine safety meetings, ensuring all are engaged Operate a robust, multi-party design review process Concentrate on understanding residual hazards after design risk assessment Principal Contractor (PC) should ideally be appointed. Must be sure that business and team are demonstrably competent (& vetted) PC must be properly inducted and given timely access to all H&S information available Pre-qualification is only a threshold to participate Critical to evaluate both the company and the team proposed, making sure both are competent Must see evidence of ability & commitment to manage H&S Better not to rely on desktop review: should interview if risks high Shortlisting and then doing due diligence proves efficient Have a contingency plan to invoke in emergency that sets minimum stds. If imposing risk assessments or safety precautions on the contractor, must ensure these are understood Be vigilant for changes to project that invalidate earlier risk studies Make sure specific site issues are fully covered Essential to coordinate routinely throughout the construction phase, as frequently as risk profile dictates Discuss general safety performance themes, not every issue Safety passport scheme sound, but must ensure course content relevant to risk profile Combine passive & active communications. Site induction is crucial (in right language) Management must live the safety rules Maintain the communication and coordination mechanisms used during construction Review results from monitoring project execution Conduct formal Project Safety Review that captures lessons from what went well, and what cold have gone better Score contractors, and use this in future awards (monitoring should link to approval) Figure 3: Additional good practices across the five stages 8

10 Moreover, there were also some key messages regarding safety monitoring and measurement: Monitoring is only useful if it contributes to continual improvement. Both active and reactive information should be used to monitor performance; safety should be constantly examined and assured through active means in a structured and disciplined manner. Safety performance needs to have a real business impact on contractors to be meaningful. Senior management need to demonstrate active and visible safety leadership. Safety inspections need to overcome language barriers to give a comprehensive appraisal. Surveillance needs to be culturally aware and recognise that some may feel threatened by the surveillance regime. Emphasis was placed on ensuring that safety does not become a paperwork exercise and that, while correct documentation is a necessary element, it is not by itself sufficient. Safety must be an engagement activity throughout the project and its participants. Orientation While there have been various changes to legislation since the last guidelines were published (for example, updating of the Control of Major Accident Hazard, Control of Vibration at Work and Construction (Design and Management) Regulations) it is not the intention of this work to update earlier guidance for changes to legislation. The approach adopted in this document differs in its focus. The aim is to offer an aide mémoire to competent practitioners generally familiar with the relevant legislation and their associated obligations. It seeks to distil the lessons that members, themselves generally competent organisations familiar and practised in their various obligations and responsibilities, have found to have worked particularly well and occasionally, what singularly has not. The purpose is not to summarise or interpret legislation, but to share experience and insight about what actually works well among industry practitioners. Hence, it concentrates on exploring the key risk areas commonly experienced, and dives deeply into how organisations have sought to manage these risks most effectively. The content is not intended to be implemented in its entirety, as more than one solution is provided in some cases and some contracting strategies will not support all of the options described. It is designed to demonstrate some of the good practices that have been applied within the sector and provide details of specific strategies that have added value. Throughout the document, each major section provides a summary of the most significant practices in the 'critical success factors' section, highlighted in a box: Critical success factors Summary of significant points in each major section Individual company best practices are highlighted in grey shaded boxes: Company example Summary of good practice demonstrated by a utility or contractor organisation 9