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Charles Woolfson Marie Curie Chair, University of Latvia Chair of Labour Studies, University of Glasgow Working on Safety Conference The Eemhof", The Netherlands. 13 September 2006. Session 12.
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Charles WoolfsonMarie Curie Chair, University of LatviaChair of Labour Studies, University of GlasgowWorking on Safety Conference The Eemhof", The Netherlands. 13 September 2006.Session 12 Beyond 'safety cultural' approaches to industrial accidents: Business organisation, precarious employment and risk transfer mechanisms in the offshore oil industry
Beyond ‘safety culture’ • It is structural dimensions of business organisation, the interlinkages and discontinuities of accountability, rather than deficiencies in normative ‘safety cultures’ which need to be addressed in examining safety failures. • “Risk transfer mechanisms” accompanying precarious forms of employment in the offshore industry are characteristic of modern business organisation as a whole. • This provides an explanation of underlying causation which goes beneath the surface of purely ‘culturalist’ approaches to safety systems or indeed ‘human factors’ approaches.
HSE, Safety and the Oil Industry Charles Woolfson
Gordon Mackie Moffat Deceased 9th October 2000 • Santa Fe Magellan rig operating 120 miles east of Aberdeen in the Elgin/Franklyn Field • On contract to TotalFinaElf Exploration UK • An assistant derrickman and a member of “C” Crew (one of four crews) • Task of securing hydraulic hoses to the casing of part of the drilling apparatus • Man-riding - suspended in mid-air in a sling attached to a winch line, approximately 40-50 feet above the blowout preventer (BOP) deck
Supervisory failures • absence of a proper tool box talk before the commencement of the fatal man-riding operation • absence of a proper risk assessment of that man-riding operation • absence of a proper risk assessment of the variation that occurred part the way through • failure to stop the work on the drill floor while the man-riding operation was taking place • failure to allocate a supervisor on the drill floor • failure to allocate a man to the mouse hole • no assessment of suitability of available personnel • no allocation of roles according to that assessment • no mutual awareness of each crew members role • no allocation of supervisory function
Management Failure • Sheriff McLernan: “The deficiencies in the prescribed system …were not in my view the primary cause of the accident. The primary cause was the almost total lack of proper supervision by the persons delegated to supervise.” • Alexander Kemp (on behalf of the relatives of the deceased): “The picture that emerges is of an accident that was waiting to happen. There really were no effective controls in place. The system of management of safety, if it ever worked, had broken down. That caused a wholly avoidable fatal accident.”
Offshore drilling industry management Magellan not an atypical installation:- • Profit and results-driven ethos of industry • History of authoritarian management • Legacy of victimisation and NRB • Lack on unionisation • In theory, ‘Time out for Safety’ • Reality, inadvisable and might carry repercussions • Suppression of workers’ ‘voice’ • Absence of effective trade unionism
Attitudes and Culture • Sheriff McLernan:- unless there is “elimination of the attitudes which were primarily responsible for the occurrence of this accident” there is a “real risk of further serious accident.”
Business interrelations: dependency and ambiguity. • Major oil companies constitute the client organisations. • In turn, they subcontract many of the specialist services to a variety of sub-contractors. • These sub-contractors drill for oil and provide many specialist functions on an out-sourced basis for offshore installations. • The oil companies retain direct responsibility, mainly for the core group of their own employees.
The maze of subcontracting • Such arrangements provide the oil companies with both numerical and functional flexibility, allowing them to adjust their operations to changing production and demand requirements. • An offshore installation is, therefore, often a multi-employer site in which the safety performance of individual sub-contractor firms is, in theory, monitored in its own right by the client company.
Legal duty of care • The main employer is responsible in law for the safety and health of everyone on the platform • Employer’s obligations overlap with those of the sub-contractor who is also responsible for its own employees' welfare. • Under the UK Health and Safety at Work Act of 1974, the main employer must take responsibility for its own workers and for those of the sub-contractors.
Ambiguities in practice • Ambiguity arises when it comes to determining who should take major responsibility for ensuring that there is an adequate level of knowledge and training to allow the sub-contractor's employees to perform their work safely. • This entails not just what the sub-contractor employees do, but what those around them do, whether they are employees of the same sub-contractor, of another sub-contractor, or direct employees of the client oil company.
Structural determination of managerial failure • The wider complex context of the nature of business organisation in the offshore oil industry • Typically complex contractual and financial arrangements • Multiple complex of business interrelations between client and subcontractors acts to minimise economic risks at each stage of the business structure
The risk transfer mechanisms • Organisational “legal proliferation” - generates a parallel structure of “occupational risk transfer mechanisms” • Even where there is an identifiable employer, the company itself operates through a variety of other subsidiaries which are legally independent entities for some purposes, but not necessarily for others. • This “chameleon-like” legal identity creates endless uncertainties over boundaries as to where, for example, the ultimate responsibility lies in safety and health at work.
Santa Fe: A Russian doll • Mr Moffat’s legal employer - Santa Fe International Services Inc, Panamanian company. • The rig on which Mr Moffat worked operated through Santa Fe subsidiary, Santa Fe Drilling Company (North Sea) Limited, registered in Lowestoft - held the Safety Case for the installation. • Santa Fe Drilling Company (North Sea) Limited also had the responsibility as the “duty holder” in law for the operational safety aspects of the Magellan rig. • Further Santa Fe subsidiaries were actors: Santa Fe International Services Inc. and Santa Fe Technical Services (North Sea) Ltd. • Santa Fe Technical Services (North Sea) employed the Rig Manager and health and safety advisors based in Aberdeen.
HSE: The Regulatory Response • Offshore Safety Division (OSD) now part of Hazardous Installations Directorate - set up in the aftermath of Piper Alpha to oversee the implementation of a new “Safety Case” regime. • Safety case requires the management responsible for each offshore installation act as “duty holder”, to carry out a comprehensive and documented appraisal of risk factors. • HSE also issues periodic advice to duty holders.
Safety Notices and Safety Alerts • OSD had issued a Safety Notice in May 1997 stating that man-riding operations that are not routine should be subject to the duty holder’s permit-to-work system. • OSD issued an industry-wide Safety Alert (2000/1) “Man Riding Winch Units”, highlighting problems as a result of the incident, need for “a suitable and sufficient assessment of risk”, reviewing equipment and procedures and “the means by which all winch motions can effectively and rapidly be brought to a halt”.
HSE and the judicial authorities • The regulatory authority has a duty to ensure that the law, in respect of the Health and Safety at Work Act (1974) is applied, and that sanctions are sought, where it is merited • HSE has the power to make recommendations to the Procurator Fiscal in Scotland for criminal charges to be brought
Possible charges under UK law • Santa Fe ignored previous HSE advice - a repeat offender. • Competent charges against three sets of actors: • The employer registered in Panama, Santa Fe International Services Inc, under Section 2(1) of the Health and Safety at Work Act and Regulation 3(1)(a) of the Management of Health and Safety at Work Regulations • the duty holder, Santa Fe Drilling company (North Sea) Ltd under Section 3(1) of the Health and Safety at Work Act and Regulation 3(1)(b) of the Management of Health and Safety at Work Regulations • The individual executive deemed responsible for the safety failure, Roger de Freitas, the managing director of Santa Fe Drilling company (North Sea) Ltd, under Section 37 of the Health and Safety at Work Act. • If successfully prosecuted on indictment, these charges could carry unlimited fines, or a prison sentence.
The “plea negotiation” • Shortly after the incident Mr de Freitas departed UK jurisdiction • Charges did not proceed to trial under criminal justice system • The Fiscal’s office engaged in what is referred to as “plea negotiation” with Santa Fe - agreement entered into about what charges will be pled to. • The Fiscal agreed with Santa Fe what facts and circumstances he would present to the Court and what mitigation they would put forward in their defence. • Santa Fe Drilling Company (North Sea) Ltd entered a guilty plea to lesser charges which did not include a Section 37 offence.
The prosecution failure • The Section 37 indictment - in line with the publicly stated enforcement policy of the HSE and HSC (Health and Safety Commission) and in line with the stated expectations of the Government and current expectations of the public (with respect to corporate accountability). • Not in the public interest that employers in the UK, who are based abroad for financial reasons, cannot be brought before the Court.
Corporate avoidance and Corporate Homicide • Prima facie grounds for a prosecution of Santa Fe under a corporate homicide law • One month after court, Santa Fe awarded ‘Compliance Document’ in Houston ceremony – “one of the first offshore drilling contractors to receive the full International Safety Management (ISM) certification for its shore-based facilities and self-propelled offshore rigs.”
Penalty for the death of Gordon Mackie Moffat • Fine at Aberdeen Sheriff Court £60,000 • Santa Fe declared net income for 2001, the year of their court appearance - $377.8 million
Conclusion • Over-focus on safety cultural approaches obscures determination by ‘deep structure’ of international business organisation. • Mechanisms of financial and risk transfer and in-built into modern forms of business organisation. • Accountability in law through corporate killing legislation is a potentially effective compliance tool for regulating corporate avoidance strategies • ‘Culture’ of safety is not enough!
