BP 2012 Annual Report Download - page 48

Business review: BP in more depth
BP Annual Report and Form 20-F 2012
46
Safety
We operate in a high-hazard industry so safety is our
top priority. We continue working to embed safety
and operational risk management into the heart of
the company.
t Our operating management system (OMS) serves as our group-wide
framework designed to drive a rigorous and systematic approach to
safety, risk management and operational integrity across the group.
t We continue to make progress on all of the remaining
recommendations from the Bly Report. As of December 2012, the
total number of completed recommendations was 14 out of 26.
t We are focusing on developing deeper, longer-term relationships
with selected contractors, identifying potentially higher-risk contracts
across the group and bringing a higher level of oversight to these
contracts as a priority.
2008 2009 2010 2011 2012
Loss of primary containment
(number of incidents)
200
400
600
800
2008 2009 2010 2011 2012
Recordable injury frequency
(per 200,000 hours worked)
0.2
0.6
0.4
0.8
1.0
International Association of Oil & Gas Producers benchmarka
American Petroleum Institute US benchmarka
Workforce
a API and OGP 2012 data reports not available until May.
Employees
0.35 0.23 0.25 0.31 0.26
Contractors
0.50 0.43 0.84 0.41 0.43
In 2012 BP reported four workforce fatalities: a road-related fatality in
Scotland; a fall from a roof in India; an incident at a compressor station in
the US; and a tractor accident in our biofuels business in Brazil.
Additionally, the armed attack on our joint venture gas facility in Algeria in
January 2013 resulted in four BP fatalities. We deeply regret the loss of
these lives.
Managing safety
We are delivering a programme of action to continuously improve safety
and risk management across BP. Our approach to safety and risk
management is informed by our experience, including what we have
learned from the Deepwater Horizon oil spill in 2010 and the Texas City
refinery explosion in 2005, operations audits, annual risk reviews, other
incident investigations and from industry practice of sharing experience.
Three objectives guide our efforts:
t To promote deep capability and a safe operating culture across all levels
of BP.
t To embed OMS as the way BP operates.
t To support self-verification and independent assurance that confirms
our conduct of operating.
A dedicated function
We established a new safety and operational risk (S&OR) function in early
2011. Our S&OR function supports the business line in delivering safe,
reliable and compliant operations across the group’s operated business.
S&OR:
t Sets clear requirements.
t Maintains an independent view of operating risk.
t Provides deep technical support to the operating businesses.
t Intervenes and escalates as appropriate to cause corrective action.
In 2012 S&OR was led by Mark Bly, the executive vice president who led
BP’s investigation into the Deepwater Horizon incident. Mark Bly stepped
down from his position as executive vice president of safety and
operational risk in February 2013 and has been replaced by Bob Fryar who
will continue to report directly to the group chief executive.
S&OR consists of a central team and teams deployed in BP’s businesses.
All teams report to the group chief executive via the head of S&OR,
independently of the business line. S&OR includes some of BP’s top
engineers and safety specialists, several of whom have experience in
other industries where major hazards have to be managed, including the
military, nuclear energy and space exploration.
The central team serves as the custodian of group-wide safety and
operational risk requirements, and runs S&OR audit and capability
programmes, with the support of a substantial dedicated audit team.
Our deployed S&OR staff work with our operating businesses – ranging
from upstream oil and gas development and production to refineries,
petrochemicals plants and retail networks. They help the businesses apply
our standards to their operations and help provide assurance to the group
as to the management of operational risks, business by business.
Operating businesses remain accountable for delivering safe, reliable and
compliant operations with S&OR setting requirements and acting to provide
independent advice, scrutiny, challenge and, if needed, intervention.
Governance
BP reviews risks at all levels of the organization, with our S&OR function
providing an expert view on safety and operational risks that is
independent of the business that remains responsible for management of
the risks. While operating line managers are responsible for identifying
and managing risks, we place strong emphasis on checks and balances,
including both enhanced self-verification by individual BP operations –
such as drilling rigs or refineries – and independent assurance by the
S&OR function.
Each business segment or function has a safety and operational risk
committee, chaired by the segment or function head, to manage safety
and risk in their respective areas of the business. The group operations
risk committee (GORC) reviews company safety and risk management
across the company.
The board’s safety, ethics and environment assurance committee
(SEEAC) receives updates from the group chief executive and the head of
S&OR on management plans associated with the highest priority risks as
part of its update on the GORC’s work. GORC also provides the SEEAC
with updates on BP’s process and personal safety performance, and the
monitoring of major incidents and near misses across the group. Where
appropriate other senior managers attend to provide briefings on safety,
environmental and operational integrity in their areas of responsibility. The
SEEAC also receives information from external sources, including Carl
Sandlin, who was appointed in 2012 to provide oversight and assurance
including regarding the implementation of the recommendations of BP’s
investigation into the Deepwater Horizon accident. See Corporate
governance report on pages 101-126 for further information on the
activities of the board’s committees, including the SEEAC and the Gulf of
Mexico committee.