Sharpening Shell’s safety culture

In 2004, the 17,000 contractors and employees working on the massive gas project on Sakhalin Island off the east coast of Russia ran a high risk of being injured in a traffic accident. Partly that was due to the harsh conditions on the remote island – poor roads and long, snow-bound winters. But bad driving habits among the island’s inhabitants were also to blame. Few people wore seat belts, drunk driving was common, and risky driving manoeuvres were considered normal. The chance of dying in a road accident was 10 times higher than in the UK.

To counter this frightening situation, officials at Sakhalin Energy launched a wide-ranging road safety programme that targeted both workers and the larger Sakhalin community. It included a number of tactics, such as changing road signs and making other improvements to locations identified as “black spots” where accidents were frequent. A seat belt campaign included television spots and posters featuring pictures of a smiling young girl strapped into a child safety seat. In 2005, officials at the company – in which Shell is a partner – launched the Sakhalin Road Safety Partnership, bringing together some 30 local organisations and the police. Officers cracked down, writing eight times more tickets in 2006 than the previous year.

These and a host of other measures produced dramatic improvements. In 2006 the rate of employee injuries caused by traffic accidents dropped to 15 per 100 million kilometres driven – a 70% decline compared to 2004. Those results illustrate what is possible when companies and the people that work for them put their minds to changing behaviour in ways that reduces the likelihood of an accident.

Performance

There are countless similar stories of successful safety programmes around Shell. The group’s fatal accident rate – the number of fatalities per 100 million working hours – has improved by nearly 50% since 1997. And over the same period, for every million hours worked, the number of Shell contractors and staff suffering non-fatal injuries that needed medical treatment or time off fell by 45%, beating Shell’s own target in 2006.
 
In March, the National Ocean Industries Association awarded the Shell Exploration and Production Company the 2006 Safety in Seas Award for the injury-free recovery of the Mars platform and pipelines that were severely damaged by hurricane Katrina. “Shell’s achievement is exemplary in successfully integrating safety and training together in a large-scale recovery effort,” said the association’s president, Tom Fry.
 
However, Shell’s safety performance is better in some parts of the group than others. And overall, compared to other major oil and gas companies, it doesn’t measure up. Shell lost 37 people (two staff and 35 contractors) last year – more than any other international oil major, and one more than in 2005. By comparison, seven contractors died working for BP while three staff and seven contractors died working for ExxonMobil.

Differences in how companies report safety performance partly explain this gap. And comparing companies using numbers alone is difficult because they don’t take into account differences in the type and location of projects, which determine how much risk workers are exposed to. Nevertheless, one thing is clear: each fatality is one too many.

A mixed story

The picture behind the statistics shows a number of problem spots intermingled with examples of world-class safety performance. Of the total number of Shell fatalities, 29 occurred in the Exploration & Production business – the front line of operations where risk is highest. Of these, 17 happened in Nigeria, with nine deaths the result of kidnappings or assaults as political and criminal violence rose sharply ahead of presidential elections.
 
Overall, three-quarters of all fatalities last year occurred away from Shell’s sites – through road accidents, kidnappings and fatal assaults, where the group has less control and safety depends even more on the behaviour of individuals. Of those who died, 95% were contractors, not direct employees.

Change in culture

So what’s going wrong? After all, the same contractors who work for Shell also work for other major oil companies. “It’s a weakness with our culture,” said Kieron McFadyen, recently appointed Vice President Health, Safety and Environment responsible for improving the safety performance across the group. “I believe we really care about safety but we need to change the way we behave. We don’t need more rules and box-ticking. Safety must be part of everything that we do. We must be constantly vigilant and intervene when we see dangerous behaviour.”
 
Ensuring people follow rules is an important part of that culture. According to Shell internal accident investigations, around 80% of serious incidents in 2006 could have been prevented if those involved had followed safety procedures. Wearing seat belts, for example, is compulsory when driving on company business. Yet last year, nine workers who died in road accidents were not wearing them.
 
Another problem – as the statistics show – is contractor management and supervision. Bill Dunnett, Vice President of Halliburton responsible for the company’s global business with Shell, thinks the group needs to engage more with contractors to put safety first. At Shell’s request, Dunnett recently conducted a review of Halliburton’s safety experience working with Shell and compared it with other major oil companies.

“I think there is an opportunity for Shell to get contractors more closely involved in longer-term strategic safety planning and make sure they fully understand Shell’s objectives,” he said. “That will help the company achieve sustained improvements in its safety performance.”
 
Dunnett, a former Shell project manager, believes the real challenge is to increase the group’s engagement with workers in the field, to make clear that safety is the number-one priority. He believes the value of visible leadership, to reinforce this focus on safety with those doing the front-line work, should not be underestimated. Though Shell always takes a strong role during the design and planning phase of projects, he says, including explaining in detail its safety requirements, the visibility of Shell project leaders varies between regions and could be more apparent once the work starts. “It’s not a question of resources, it’s about Shell completing the process through implementation and getting more value and impact from that effort and commitment.”

Response

So what is Shell doing to improve its safety performance? In addition to long-standing initiatives – such as the Hearts and Minds programme that is designed to build a stronger safety culture, and sharing lessons from incidents across the group – Shell is launching new initiatives.
 
“We are working to create a safety culture where compliance is something we all do, all of the time,” explained McFadyen. “We need to be relentless. There are no quick fixes or silver bullets.” In 2005, Shell adopted its so-called golden rules – three simple guidelines to encourage staff to take personal responsibility to promote safety. The rules state: “You and I comply with the law, standards and procedures, intervene in unsafe or non-compliant situations, and respect our neighbours.” Significantly, the rules place responsibility on individuals to get involved and raise the alert when they spot potential dangers and rule breaking.
 
Shell also launched group-wide safety days to improve compliance with rules and drive home the importance of individual responsibility. In 2007 Shell is holding two safety days. During the first, in early June, employees were asked to discuss rule breaking and barriers to better performance and think about ways they can contribute to improving results. Feedback from the sessions is being analysed to see where group-wide improvements can be made in Shell’s rules and procedures. During the second, scheduled for mid-October, Shell will look at what has been changed and employees will share experiences.

To keep contractors focussed on safety, Robert Willemsen, who handles Shell’s Exploration & Production business’s relationship with major service companies like Halliburton, says Shell is rolling out a new contractor management standard. The business will scrutinise each contractor’s safety record and capabilities more closely, pre-approving those with better performance to compete in contract tenders and weeding out those who fail to meet the mark.

Enhancing supervision will require more safety specialists out in the field. “When we looked at our competitors with the best safety records, we found that they had significantly more safety staff in the field at the work sites providing specialist safety advice and support to the line supervisors than we have in Shell,” said Don Jacobsen, a Vice President responsible for safety in Shell’s Exploration & Production business. “We have relied too much on process and procedures. We expect contractors to implement them but it’s clear that’s not enough.”

In response, Shell’s Exploration & Production business is bringing more field-based safety specialists into projects where safety risks are highest, such as new exploration, seismic and drilling campaigns in Ukraine, Libya and Algeria and major new deep-water construction projects in Brazil and the Gulf of Mexico. “In the last year or so, we have added about 50 of these specialists,” said Jacobsen. Elsewhere in the company, attention has turned to raising the profile and importance of health and safety jobs and ensuring that future leaders have solid experience in this area before moving on to senior leadership positions.
 
Learning from incidents and co-operating across the industry is another important element in tackling safety. In June, senior executives from Shell hosted a dinner for their counterparts from the main contractor companies to discuss safety and how to improve compliance and safety together. And in March Shell invited safety specialists from a number of large international oil companies and contractors to a workshop to explore how best to help workers at all levels – particularly those on the front line of operations such as engineers and supervisors – learn from safety incidents and identify similar risks in their work.

As a result of the workshop, Shell will launch a pilot project by year-end to improve safety training. In future, when alerts go to staff and contractors about specific risks – such as working close to electric cables – they will include exercises and suggestions to help managers pass on knowledge to those doing the job. These may range from interactive exercises for exploring complex incidents in refineries, to pictures flagging unsafe behaviour during maintenance.

Working closely with regulators is also essential. Shell is playing a lead role in co-ordinating the industry response to the Buncefield oil depot explosion in Hertfordshire, England in December 2005. In this incident, the overfilling of a petrol tank at a depot used by many different companies led to an explosion, devastating the site and surrounding buildings. Working with the UK’s regulator, the Health and Safety Executive (HSE), which investigated the accident, Shell specialists sit on all the investigation panels of the task group set up to make recommendations on how to improve refinery safety and avoid future disasters.

Kevin Allars, head of the chemical industries division of the UK HSE’s hazardous installations directorate, said: “Shell is ahead of the game in releasing trade union representatives to work with us and share learnings from incidents.” According to Allars, Shell UK was also quick to learn from the blast at BP’s Texas refinery, investing 14 million pounds ($28 million) within 12 months of the US accident to protect workers’ accommodation and buildings during plant shutdowns. But he also points to the importance of learning from near misses and is pushing the industry now to focus on developing better leading indicators of safety issues – looking at things like maintenance backlogs that draw attention to possible dangers, rather than simply recording incidents after they occur.

Targeting consistency

Until earlier this year Ken Rivers was the manufacturing director at Shell’s Stanlow refinery and chemicals complex – the UK’s largest – and recently chaired the industry’s Buncefield task group set up by the UK’s HSE. He believes executives take the issue seriously and are now more focussed on process as well as personal safety. “I have noticed a change. The safety issue is recognised at very senior levels. Decisions are driven by safety needs, not budgets.”

The challenge now is getting consistent safety performance across the group. Allars points out that even at Stanlow – which has won a number of awards from the Royal Society for the Prevention of Accidents in recent years – incidents still occur. Shell was prosecuted for two incidents in 2003 – one during the loading of a tanker, the other a release of butane – and more recently a worker was seriously injured by a falling load.

So efforts are under way to clarify and standardise procedures. In June this year, Shell approved a new safety standard detailing group-wide rules on how to design and maintain facilities, and enhance process safety at complex locations like refineries. It also approved a new road safety standard. A new team, reporting to senior executive Greg Lewin, President of Shell Global Solutions, will be put in place to check that the standards are implemented.

Ultimately, Shell’s goal is zero fatalities. The statistics show there is some way to go to achieve that. Yet Elena Vorontsova-Kasumyan, an environmental advisor for Sakhalin Energy, knows first-hand that when individuals take responsibility to insist on safety, they can save lives.

Travelling to the north of Sakhalin Island in 2005, the car in which she rode crashed into a deep hole where a storm had washed the road away. The vehicle was badly damaged, with the windscreen smashed and the front end crushed like a concertina. Having been politely but firmly told by the driver to use the seat belt, Elena and two passengers survived the accident. A fourth, who was not wearing a seat belt, suffered multiple injuries and later died. “If I hadn’t been wearing my seat belt I would definitely not have survived,” said Elena. “Why be in a hurry to your own death?”

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