1. Contractor Health & Safety Forum
Brownfield Projects
Contractor Health & Safety Forum
Paul Dean Project Engineering Manager/NRA Deputy Delivery Manager
August 05, 2008

2. CONTRACTOR HEALTH & SAFETY FORUM | PROJECTS DIVISION
Objective
‘Our Performance has flat lined… What do we do next?’
To come up with a Strategy on how we as a Group can make an impact on the next step in Safety Performance.

3. CONTRACTOR HEALTH & SAFETY FORUM | PROJECTS DIVISION AGENDA
Arrival | Parmelia Hilton - Karri Room | Tea and Coffee
Introductions, Safety Briefing & Objective Sponsor : Ian Wilkinson mins
Overview of Woodside NWS Business Objectives Eve Howell / Roy Thompson mins
HSE Highlights, Lowlights, Trends & Lessons Learnt Aidan Hayes
Henk Feyen mins
Legal | Sparke Helmore Greg McCann mins
Coffee Break | Morning Tea mins
Case Study ‘Major Malfunction’ – Challenger Incident Facilitator: mins
Table Exercise – Key Learnings from Case Study Paul Dean mins
Table Feedback on Key Learnings hour
LUNCH mins
DVD | Gas Explosion mins
Table Exercise –What do we need to do (collectively) to reduce Facilitator: our risk exposure and meet our HSE objectives? Paul Dean mins
Rank and agree on way forward (Top 5 options) mins
Coffee Break | Afternoon Tea mins
Feedback Form Dale Gration mins
Just a Number Helen Fitzroy mins
AOB | Next Forum – Closure Dale Gration mins
Drinks & Nibbles

4. TW ISC Director and Forum Sponsor
Ian Wilkinson
TW ISC Director and Forum Sponsor

6. TRCF Jan 05 thru June 07

7. Key Messages
Started between a small group and wanted to address what can we do better to improve the current situation. Overall worsening performance in the organisation.
Cover some givens – we all want to improve safety performance.
Secondly, we face similar circumstances; shortage of labour, lack of training and experience, tight schedules and a client common to all. Our safety performance affects each other. We must work to address this together.
Thirdly from TW perspective, the fact is that within WA, we do not match the safety performance of our global peers.
Not necessary to be competitive. Good safety performance is good for all. Protect our people, our client. Help each other to perform better.
Ironic – sell together to improve safety performance. Issue around flat-lined safety performance have to do better by working together. Concrete actions to carry forward. Once session won’t improve but when walk away and action after this session.

8. Executive Vice President NWS
Eve Howell
Executive Vice President NWS

9. Senior Vice President Oil and Gas Projects
Roy Thompson
Senior Vice President Oil and Gas Projects

10. HSER Manager Project Development
Henk Feyen
HSER Manager Project Development

11. Sparke Helmore Lawyers
Greg McCann
Sparke Helmore Lawyers

12. Contractor Health & Safety Forum Tuesday 5 August 2008 Legal Lessons Presented by Greg McCann

13. Incident at your Workplace
Safety Laws
Incident at your Workplace
How to Demonstrate Safety is Integrated in your Business
Your Workplace and the Courtroom

14. Critical incident impacts
Potential Impacts
Civil Claims – by the family
Fatality – Coronial investigation, findings, recommendations
Workers’ Compensation
Investor relations
Tender implications
Commercial Reputation and Commercial Relationships
Community reaction
Licences are jeopardised
Disciplinary action – industrial issues
Criminal investigation and / or prosecution
Tip: The impacts can be immediate and long lasting

15. The Petroleum (submerged Lands) Act 1967 Occupational Health and Safety
Strict Liability
Concurrent Liabilities
Criminal Onus
System of Work
Cater for the careless, inadvertent, hasty or disobedient employee

16. Operators Obligations:
An operator must take all reasonably practicable steps to ensure that the facility is safe and without risk to “any person” and all work or other activities carried out on the facility is safe and without risk.
- Contractors, eg.
Labour hire
Service suppliers
Electrician
- Third parties, eg.
Sales representatives
Family members, children, friends
Penalty – 1000 penalty units
Inspector Pompili v Central Sydney Area Health Service

17. Liability of Director, Servant or Agent
Where a body corporate is guilty of an offence, a director, manager or servant or agent will be guilty of that offence:
Defence:
Took reasonable precautions and exercised due diligence to avoid the conduct
Maximum Penalty
1000 penalty units (=$110,000.00)
Case Law
Morrison v Perilya Broken Hill Ltd
Company Director

18. NOPSA Prosecution Coogee Resources Between 2 May 2006 and 11 May 2006
Breach of Petroleum (Submerged Lands) Act
The registered operator of “Jabiru Venture” in Timor
Sea failed to take reasonably practicable steps to
ensure facility was safe and without risk to health.

19. NOPSA Prosecution (cont)
An operator who had only recently commenced work
on the platform conducted work outside of the hand
railed area, tripped and fell 4.7metres into sludge
suffering serious injuries.
New JSA conducted identified the potential hazard of
falling from heights and inadequate lighting.
Maximum penalty $550,000.00
Penalty imposed $180,000.00

20. How do you demonstrate safety is a totally integrated
component of your business

21. Serious Incident Management Procedure
Initial response
Legal Professional Privilege
Your Investigation
Media
Safety alerts
NOPSA Investigation
Documents (6 months imprisonment)
Due Diligence

22. Your Workplace and the Courtroom

23. Conclusion YOUR SAFETY MANAGEMENT SYSTEM IS YOUR BEST DEFENCE
Bulletins for changes to Safety and Environment Legislation and
Recent Court Decisions.

24. Thank you

25. Coffee Break

26. Challenger Disaster
Presented by Paul Dean

27. Challenger Disaster Not an accident Larry Mulloy – NASA Manager
Heartbreak
My Fault
Presidential enquiry
Known low temperatures
Concerns by Staff and contractors
Outside our experience base
Alan Macdonald – Thikol
Sent a note not to launch below 53ºF - actual was 29ºF
Flaws long known about sealing of rocket motors
Previous mission delayed several times
This mission delayed several times
Mounting pressure from the media
Teacher on board, giving a lesson from space…on the weekend to empty classroom if delayed!
Previous flight at low temperature, problems with booster rockets
Morton Thikol (Rocket Contractor – Boosters)
First launch SRB was flexing, O Rings were working beyond design
Defined as acceptable risks by NASA

28. Challenger Disaster 25ºF was below experience base Never been tried
Thikol presentation needed
Recommended not to launch by Thikol
1985 letter written about O’Ring erosion – internal, not shown to NASA
Thikol prepared a no flight presentation
Late presentation
NASA and contractor working after-hours
Implications for Thikol managers
Contract with regards to NASA was up for renewal
Meeting at NASA, Florida – telecom between NASA and Thikol
Recommendation not to launch (Thikol Engineers)
Erosion of O’Ring due to cold (temperature and loss of seal will be catastrophic
Too dangerous to launch
No simulation done for these conditions
NASA says conclusion “does not hang up”
What evidence do you have?
Has been accepted in all previous flights (blow by)

29. Challenger Disaster
Vice President of Thikol
“Not to launch”
Engineer has to rely on data – NASA says “no data, on the contrary performs better at low temperatures”??
NASA manager
Is it logical?
George Harding – (Senior Engineer at NASA)
Shocked by Thikol’s presentation
Although won’t agree to launch against contractors recommendation
Preparations for launch continued
Thikol management now questioning risk
Engineer cannot prove it will fail but expects low temperature will make it worse
Photo’s show low temperature is a problem?
Thikol Management says data not conclusive
“Guess its alright to launch”
Engineer – “I was powerless”
Thikol– recommends launch as conditions will not be different than previous launches
Result
Cold froze the O’Rings coupled with severe cross winds caused seal failures
Not an accident!! It was foreseen
“Just happed to be involved in an accident” NASA Chief

30. Case Study – Table Exercises

31. Case Study – ‘Major Malfunction’
Team/Table Exercise
Review the video and consider
Major contributing factors
Influencing aspects, people, situations
Internal / External pressures
Could we have a similar incident happen in our business
Discuss the Incident and determine key findings
Discuss and agree Root Causes
Determine key learnings
Table Feedback – Nominate a Spokesperson
What did we learn from the incident?
What would we do to prevent a similar occurrence?

32. Table exercise Major Contributing factors * "Prove it" culture
* Commercial / Contractual - reputation and major contract to loose
* Communication problems. Lack of transparency
* Element of complacency. Basing judgement on last 25 successful launches. Wilful
disregard on new information.
* Insufficient management support for engineering decision
* Key stakeholders dismissal/ not contacted
* Lack of manufacturing data - engineers did not have relevant data
* Lack throughout process of any type of third party verification.
* Lessons learned not implemented (kept in-house)
* Management influence - peer pressure
Non-democratic decision process
* Media pressure
* Misalignment of expectations
* NASA contractor "What is acceptable risk?"
* NASA safety culture - pushing responsibility down to contractor. Contractor to accept the
risk.
* No previous exposure to low temperature
* No recognition of human risk. Driven by dollars, schedule reputation.

33. Key findings Major Contributing factors * Political pressure
* Poor basis of design
* Poor management of change process
* Schedule: deadline / critical path pressure
* Two parties client and subcontractors. Two interested parties. Should have been
independent party.
* Political pressure: Internal / External NASA
* NASA accepted a less than adequate design.
* Lack of acceptance by NASA
* How do you define an acceptable risk?
* Better communication and alignment with contractors
* Technical assurance in parallel with management role
* Renegotiating contract
* Alignment of stakeholders
* Risk process poor
* Lack of experience
* Operating envelope

34. Key findings
Could you have a similar incident happen in your business?
* Clear lines of communication between all parties
* Bullying not accepted.
* All stop! Try to empower everyone to call an "all stop". The two engineers who tried to call
an "all stop" were questioned by manager. Would our people feel sufficiently empowered to
call an "all stop"?
* To be conscious of scheduling and timing.
* Design acceptance criteria to be stringent.
* Safety First - assurance checks. Independent verification.
* Robust management of change process.
* Improve safety culture across the board.
* Understanding and implementing of lessons learnt.
* Identify risks and takes steps to mitigate
* Technical integrity and management
* Alignment with contractor safety
* Data and testing should have been done.
* Management pressure and culture.
* Understanding conditions.
* Lack of acceptance by NASA
* Unreasonable pressure on contractor.

35. Lunch Break

36. DVD Gas Explosion

37. Table Exercise
What do we need to do to reduce our risk exposure and meet our HSE objectives?

38. Table Exercise – Meeting our HSE objectives
‘Our Performance has Flat Lined…….What do we do next?’
What do WE need to do to deliver a step change?
Consider what we have covered today:
Safety culture, management focus, denial, operational pressures
The implications of maintaining our current performance
Our current Safety trends – increasing risk, increasing incidents?
Our business objectives
The current business environment
The Challenger and Veranus incidents

39. Table Exercise – Meeting our HSE objectives
In your teams:
Consider what are the key problems, issues & barriers
What would be the “ideal scenario”, ie. no constraints
Given the ideal scenario how will we get there? What options do we have?
Appoint spokesperson and present findings.
Then…
Collectively rank our options
Each table to spend 5 minutes deciding on the top 5 options
Spokesperson to mark up master options sheet (one tick for each item)
Zelda to collate the “Top 5 Options list”

40. How will we get there? National framework for supervisor training
Develop rapid lessons learnt process
Lesson learnt from peer groups or wider industry
Consistent Golden Safety rules.
More regular engagement between contractors
Attitude – Assessments, training, monitoring and supporting. Some form of blacklist.
Common training scheme / Competency. Log book.
Substantial inductions.
Same safety tool.
Commitment / alignment – all CEO’s
Engage unions and government.
Share pool of critical resources. (example crane drivers)
Rotate safety champion.
Draw up on execution plan.
Mentoring.
Employee career plan. Defined R&D
Contract management more hands on.

41. How will we get there? Reinforce HSE messages by making it personal
Run inductions by people with work / site experience
Pre-mob planning - More time for inductions
Try and increase number of experienced supervisor. Increase ratio of supervisors to inexperienced people.
Procedures must be robust.
Greater numbers of HSE advisors / coaches on site.
More resources required for lessons learned and feedback on that.
Well motivated team
Contractor / client interface (must listen)
Implement learnings
Aligned behavioural safety training (Woodside)
Common process risk
Realistic schedules with HSE float
Simple, common leading and lagging indicators across all work groups
Common PTW across oil and gas

42. How will we get there? Improved leadership and supervisor education
Senior supervisors at plant
Achievable and sustainable safety goals
High standard mature safety management culture
Align all contractors with Golden safety rules and safety training
Structured ASA’s compliance with Golden Safety Rules
Only use qualified contractors
Ongoing HSE Forum

43. Table Exercise – Meeting our HSE objectives
External assignment
From the “Top 5 Options” each company to:
Work up your own strategies to address the Top 5.
Feedback at the next forum.
Did it work for you?
What was your experience?
Next forum – where to from here?

44. Feedback Form
Dale Gration

45. Helen Fitzroy – Just a Number

46. AOB - Closing
Dale Gration

47. Closing
James Reason: “Safety management systems are brought to life an appropriate organisational culture”.
Edgar Schein:
Culture – ‘it’s the way things are done around here”  Aidan Hayes / Henk Feyen – improve the culture.
Leaders create and change cultures, managers and administrators live within them.
Woodside wants to be a leader – Henk Feyen.

48. Closing How do leaders do this?
Leaders create cultures by what they systematically pay attention to:
Greg McCann – what have you done for safety and can you demonstrate what you have done!
It’s what they:
Notice and comment on;
Measure and report on;
Control – Risk management / Change management
Reward / Recognise; and
In other ways what they systematically deal with (workplace and courtroom)
“The conversations” – Greg McCann
“What have you done previously?”

49. Closing
The point Schein makes is that organisational cultures may be detrimental to safety not because leaders have chosen to sacrifice safety to chase production but because they have not focussed their attention on safety – Criminal conviction.

50. Please join us for Drinks and Nibblies at the Globe Restaurant