Panel Finds BP Lacking in Safety Leadership

According to a report issued Jan. 16 by an independent panel that BP convened after the Texas City refinery tragedy, BP suffers from a lack of "effective process safety leadership" at the highest levels of the company, among other safety issues.

"Based on its review, the panel believes that BP has not provided effective process safety leadership and has not adequately established process safety as a core value across all its five U.S. refineries," the report says.

The panel – led by former Secretary of State James Baker – in a 374-page report details its analysis of safety at BP's five U.S. refineries. The report notes that the 11-member panel focused on process safety, which the panel defines as involving "the prevention of leaks, spills, equipment malfunctions, over-pressures, excessive temperatures, corrosion, metal fatigue and other similar conditions."

"The Texas City tragedy in March 2005 was a process safety accident," the report says.

Among its findings, the panel also asserts that BP's Texas City refinery and its refineries in Toledo, Ohio, and Whiting, Ind., have not "established a positive, trusting and open environment with effective lines of communication between management and the work force." The report notes, however, that "the safety culture appears to be improving at Texas City and Whiting."

Panel: BP Needs Process Safety Management System

The panel's findings are divided into three categories: corporate safety culture; process safety management systems; and performance evaluation, corrective action and corporate oversight.

In the corporate safety culture category, the panel found that BP "did not effectively incorporate process safety into management decision-making."

"BP tended to have a short-term focus, and its decentralized management system and entrepreneurial culture have delegated substantial discretion to U.S. refinery plant managers without clearly defining process safety expectations, responsibilities or accountabilities," the report says. "In addition … BP has not demonstrated that it has effectively held executive management and refining line managers and supervisors – both at the corporate level and at the refinery level – accountable for process safety performance at its five U.S. refineries."

According to the report, BP also was ineffective in the following areas:

  • Measuring and monitoring process safety performance; Implementing an effective process safety audit system for its refineries;
  • Instilling a common, unifying process safety culture among its US refineries;
  • Ensuring adequate identification and analysis of process hazards;
  • Ensuring timely compliance internal process safety standards and programs;
  • Adequately ensuring that U.S. refinery personnel and contractors have sufficient process safety knowledge and competence; and
  • Instituting root-cause analysis procedures to identify systemic causal factors that may contribute to future accidents.

The panel makes 10 overall recommendations to BP. Among them, the panel calls on BP executives to "provide effective leadership on and establish appropriate goals for process safety" and urges the company to "establish and implement an integrated and comprehensive process safety management system that systematically and continuously identifies, reduces and manages process safety risks at U.S. refineries."

The panel also asserts that BP needs a system to ensure that all BP employees – from executive management down to workers and contractors – "possess an appropriate level of process safety knowledge and expertise."

CSB Pleased with Report Findings

The March 23, 2005, explosion at BP's Texas City refinery – which killed 15 workers and injured 170 others – prompted the Chemical Safety and Hazard Investigation Board (CSB) to issue an urgent safety recommendation for the first time in its history, calling on BP PLC to form an independent panel of experts to review safety at the company's five U.S. refineries.

CSB Chairman and CEO Carolyn Merritt commended the BP safety review panel for presenting its findings, which, according to her, demonstrate that the "serious concerns" CSB voiced in August 2005 about BP's safety practices were justified.

"The panel's findings present a landmark opportunity for the boards of directors and executives of oil and chemical companies throughout the world to re-examine their own safety cultures and ask whether they are sufficiently investing in the people, procedures, and equipment that will make their workplaces safe from catastrophic accidents," Merritt said. "This is an opportunity for review and reform on a worldwide scale."

"Safety culture is created at the top, and when it fails there, it fails workers far down the line. That is what happened at BP," she added.

According to CSB, the board will vote on closing the August 2005 urgent recommendation to BP once CSB has completely reviewed the panel's report. CSB's final report on the root causes of the March 2005 explosion is in the final drafting stages and will be released on March 20 at a public meeting in Texas City. It will propose recommendations at the national level to prevent similar tragedies in the future.

Browne: BP Will Implement Panel Recommendations

The release of the report comes on the heels of CEO John Browne's announcement that he will step down by the end of July. He will be succeeded by Tony Hayward, the company's head of exploration and production, who will assume the task of trying to repair the company's reputation with the public and investors.

In a statement, Browne stated that that the company will implement the recommendations made by the panel in a continued effort to "improve its safety culture and to strengthen and standardize process safety management at BP's five U.S. refineries."

"Many of the Panel's recommendations are consistent with the findings of our own internal reviews," Browne said. "As a result, we have been in action on many of their recommendations for a year or more."

"Our progress has been encouraging but there is much more to do," he added.

To read the report in full, go to http://www.bp.com/bakerpanelreport.

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