Intelligent Systems in Process Safety On the taming of the shrew?
April 25, 2001
Technical Program Snapshots
April 25, 2001

The Times They are a Changing

The Times They are a Chang’in was the title given to the talk presented by Richard Gillis to the SLP on 5th February 1999.

Richard used the title of the Bob Dylan song, as the reference is as valid today as it was in the 1960s when Dylan wrote his song.

We are in the midst of an enormous upheaval in the petroleum and petrochemical business. Mergers, acquisitions, divestitures, joint ventures, re-engineering and right sizing are announced regularly.

In 1998 the Exxon – Mobil, BP – Amoco, Total – Petrofina mergers were announced. These will cost over $US 150 billion, save over $US 3 billion per year but at the cost of well over 10,000 jobs.

The objectives for the changes in the business include cost minimisation, profitability and efficiency.

The consequences to the organisations are reduced resources in the area of loss prevention, a reduced capacity to manage the potential risks, a reduced capacity to influence management and the authorities whilst the demands for reducing losses increases.

Does it work? The business writers seem to be coming to the conclusion that companies that re-engineered are not making the sustained planned profits originally claimed. The causes are many and varied, ranging from incompatible company cultures to power sharing between the top executives. However the changes do have a big impact on our jobs and careers.

The consequences to the loss control function is a need to demonstrate cost-effectiveness

The personal consequences are that the future will be very different to the past. Job security can no longer be taken for granted. Consultants, either internal or external will become more common. If we are not a consultant then we will be managing consultants. The industrial hygiene employment demographics in Australia over the past 10 years have seen the percentage of consultants rise from 10 to nearly 50%.

We will have our competency challenged. Multi-skilling in the loss prevention functions will be required to ensure our future careers. An American Industrial Hygiene Association survey found that in the period 1997-2002 82% of it’s members expect to move from working industrial hygiene issues to working safety, health and the environment issues.

Our approach to the management of our functions will also change. The effectiveness of our activities will need to be in mind-set of a SHE specialist. Some companies are using loss control specialists not only as a marketing tool but also by consulting as a profit centre in the company.

The loss control functions are also changing rapidly. Management systems are being introduced to provide a basis to manage potential risks using a standardised, systematic approach. ISO 14000 is making rapid advances. The BS 8800:1996 Guide to Occupational Health and Safety Management Systems (HS(G)65) was introduced in England. However the ISO 18000 Safety and Health management system was delayed in September 1996. The need for a management system still exists so the American Industrial Hygiene Association has introduced their own OH&S Management System. Many companies have their own systems.

Loss prevention will need to be managed like other business activities, using management language, not technical jargon. Management is focused on costs. Consequently we may need tools such as activity based costing to show the real cost of loss prevention programs. The programs will need to be defensible in demonstrating effectiveness. Measures of failure are an inadequate performance indicator. Health is a problem as latency and lack of specific causes for ill health endpoints preclude measuring health failures effectively. There will be a need to demonstrate risk management processes are in place using process activity measures in lieu of measures of failure.

The loss control issues whilst retaining the classic issues will also see the emergence of a new range of issues. These will range from specific technical issues to wide ranging issues with political management. The emerging issues will be forever more subtle problems associated with very low levels of exposure or synergistic effects, potentially significant but often unproven effects about which there will be competing technical opinions as science does not have or cannot provide answers.

Our ability to be able to monitor more hazards at ever decreasing limits of detection will provide a problem in interpretation. Access to information from the Internet will level the knowledge base so that employees, activist groups and communities can be well informed.

Risk communication to allay community concerns about unknown consequences of our actions if unsuccessful will attract the attention of activist groups, local and international, and the possibility that the precautionary principle will be invoked. Managing risk communication will become vital if we are to minimise external pressure on our company businesses.

The SME will be unchanged. Management does not have the loss control skills, know the law, nor have the support to improve their performance. The SME will still require assistance. Even just maintaining regulatory compliance is not adequate, as the minimum standards do not protect against future liability or imposition of external controls.

Large enterprises have fewer functional resources – fewer people knowledgeable in area – in ability to identify need for assistance – inability to manage contractors.

The good old days are just that. The future will be different and not easily predictable. The times they are a chang’in.

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