Leading from the top in process safety6 August 2018
Martyn Lyons, Chief Executive of Inter Terminals, explains why leading from the top in process safety is essential to good business performance
Drawing on his 30 years of experience in the tank storage sector and senior roles within related industry associations and industry/Regulator forums, Martyn Lyons, Chief Executive of Inter Terminals, explains why leading from the top in process safety is essential to good business performance.
Control and management
It goes without saying that a bulk liquid storage business depends on the careful and responsible handling and storage of customers’ products. Good and effective governance, control and management of process safety, alongside ensuring that major (and minor) incidents are prevented wherever possible, are wholly consistent with commercial success. A hazardous event, such as a loss of containment, has the potential to cause significant harm to people and the environment. In addition, the company concerned will be faced with the economic consequences of potentially huge injury claims, clean up costs and possible prosecution – not to mention loss of reputation. There is, therefore, a clear ethical and business case for investing in an effective Process Safety Management (PSM) system and to be successful and sustainable that system requires the commitment of the entire workforce, starting at the top.
Catalyst for change
The catastrophic incident at the Buncefield oil storage depot in December 2005 acted as a catalyst for change in process safety and lessons learned from that incident have helped to make the bulk liquid storage industry safer. Among its many recommendations back in 2008, the Buncefield Major Incident Investigation Board identified the need for a working knowledge and competence of process safety at board level and a clear policy on PSM that is driven from the top and is understood by everyone throughout the entire organisation. Good safety does not happen by chance and requires constant active engagement at all levels and should involve both direct and contract staff.
Having represented the tank storage sector on a number of senior industry & Regulator safety forums and been involved in delivering on the recommendations arising from Buncefield at Inter Terminals, I recognise the vital role of senior management in providing process safety leadership and cultivating a positive safety culture throughout the organisation in conjunction with our Safety, Health and Environmental (SHE) team. Whilst they are inextricably linked it is important not to confuse occupational safety and process safety. They are two different disciplines and effective management and success in one doesn’t necessarily lead to success in the other.
So what do we mean by process safety? Whereas occupational safety focuses primarily on creating and maintaining a safe working environment that is free from hazards such as contact with oils and chemicals, slippery surfaces, moving vehicles and unguarded machinery, process safety is about managing the integrity of hazardous processes and storage systems as well as the optimization of human performance and reductions in human failure and requires a combination of engineering and management skills. Just like financial risks to the business, process safety risks should be assessed and reviewed regularly at board level using appropriate risk analysis methodology. Also, at least one board member should be fully conversant in PSM in order to advise the board on managing risk and the process safety implications of board decisions. At Inter Terminals that responsibility lies with me.
Tank storage operators need to invest in the necessary systems and procedures to retain corporate knowledge relating to PSM. This can include information on the safety design concept of plant and processes, together with any learning from past incidents that may have impacted on process safety integrity, and any improvements implemented to prevent a recurrence. Having effective management systems in place, setting and regularly reviewing relevant KPIs, and categorising events appropriately all have a part to play in good PSM. To assist the latter Inter Terminals has introduced a system based on Process Safety Performance Indicators for the Refining and Petrochemical Industries (ANSI/API Recommended Practice 754) and is aligning its long established suite of leading and lagging KPI’s to this system. Equally applicable to bulk liquid storage operations where loss of containment has the potential to cause harm, this system classifies safety events into four tiers of leading and lagging indicators, from indicators of management system performance and minor incidents representing challenges to the management system and / or learning events through to events of greater consequence where loss of containment has occurred. The system enables us to measure activity and status of events and identify accident precursors and tackle emerging issues.
Learning and participation
In addition to monitoring safety performance, information should be published on a regular basis to provide assurance about the identification and management of risks. Benefits also come from sharing best practice with others in the sector and elsewhere. To assist this, mechanisms should be in place to incorporate learning from relevant incidents in other organisations. In addition, active participation with industry and regulatory bodies helps to ensure the business stays abreast of the latest safety developments. Inter Terminals achieves this via active participation with the Tank Storage Association (TSA) and other relevant trade associations.
How companies put recognised process safety principles into practice will depend, to some extent, on the size and scale of their business. Inter Terminals’ continuing investment in process safety reflects our multi-national, multi-site network of bulk liquid storage terminals. Appropriate resources are made available to ensure a high standard of PSM and competence at each of our sixteen terminals with fully trained safety officers available to all sites. This resource is complemented by an independent Safety Health and Environmental (SHE) team, which we have expanded in recent years to meet increasingly stringent standards and regulations in these areas.
Incidents do happen however, but how they are handled can make all the difference to the outcome. Incidents must be investigated to understand root causes and contributory factors. Human actions or behavioural factors can be difficult to control and may manifest themselves in repeating events caused by non-compliance with established procedures/practices or deviation from procedures. In these cases companies are advised to explore and understand the reasons why an operative didn’t follow set procedures. Regular reviews of procedures, with engagement from operators using those procedures, is an important part of the PSM process and may address any issues that operatives may have with compliance, which in turn may prevent a minor repeating event from becoming a major incident. It is also important to have a system in place that ensures actions arising from the outcome of an investigation are implemented and in a timely manner. An investigation report must not be regarded as simply a matter of routine and then filed away and forgotten.
Incident costs can often be underestimated by the business if they are not fully discussed and understood at board level. In addition to the headline figures of dealing with an incident, every detail of time spent in person hours and other resources used should be logged to calculate the true cost. This may include staff downtime and loss of activity and revenue while remedial works are completed.
Training and leadership
According to a publication by the Energy Institute, a lack of direction and oversight from leaders has been cited as a major contributory factor by investigations into some of the largest incidents that have occurred in the energy industry. This supports the need for regular training at executive level to maintain a board’s knowledge and awareness of safety. At Inter Terminals we recognise this requirement and run four director training sessions a year covering such topics as Management of Change, Risk Assessment, Incident Investigation and Safety Culture and Leadership. Leading industry bodies like the HSE and Energy Institute are also working to provide targeted support and guidance for board members and senior personnel on safety decision-making.
From our experience at Inter Terminals, effective training and leadership at board level enables our organisation to maintain what could be described as a healthy ‘unease’ of safety performance at the top – something which I believe is essential in any business to prevent complacency. So to sum up, don’t allow your management team to sit in isolation – ensure their competence, involvement and visibility because good safety is good business.