International Pipeline Conference & Exposition (IPC) 2014
Panel - North American Regulatory Vision for Energy Pipeline Safety Management Systems and Safety Culture
Peter Watson - Chair & CEO of the National Energy Board
Monday, September 29, 2014
[Check against delivery]
Personal introductory remarks – Chair to add
This afternoon, we’ve heard about the importance of safety management systems in the development, implementation, and oversight of critical processes that manage risk.
We also heard that management systems only tell one part of the story. The other factor that influences safety and environmental protection is the organization’s culture.
A recent study of several major industrial accidents commissioned by the NEB indicated that most of the organizations we looked at had management systems or programs developed. That said, the programs were not effectively implemented. They were also not reviewed on a regular basis.
The study found that when major accidents occurred, there was often an observable disconnect between the company’s vision and policies and their planning, implementation, monitoring, and review.
Other reports on major industrial accident have highlighted an equally disturbing pattern. Organizational cultures that lack the commitment and necessary resources to ensure every person puts safety ahead of commercial pressures.
The Case for Safety Culture
There is clear evidence from the analysis of global incidents that lack of a strong safety culture is a key factor in most high consequence accidents.
This has highlighted the need for companies to develop a pervasive organizational culture in which safety is a core value demonstrated by all personnel at all times.
Culture influences what people see, hear, feel, and say.
Perhaps most importantly, it influences the decisions and actions of people in an organization. These behaviors ultimately drive safety performance.
When it comes to culture, it has been said that organizations tend to become "shadows of their leaders" over time. Others have suggested that leadership and culture are two sides of the same coin.
We, at the National Energy Board, agree with these assertions. Culture creation, oversight, and management are the essence of leadership. Particularly in high hazard industries where the consequences can be catastrophic.
For senior executives in the pipeline industry, the moniker “Chief Culture Officer” is fitting. This most senior leadership position carries important obligations. This person shapes and reinforces a robust safety culture in which the company demonstrates a continual respect for threats to its defenses.
A leader’s role starts with genuine commitment. This means investing in and understanding the cultural factors that influence safety and environmental protection outcomes.
Leaders who have successfully built or enhanced culture know there is a big difference between endorsing an initiative and owning a cultural transformation.
The required investment of time, energy, and resources means it can’t simply be an intellectual exercise to meet some prescribed minimum standard. It has to be a personal mission for the person at the top. It’s their duty to drive the culture and values down and across the organization.
Fortunately, they don’t need to do it alone.
Each and every leader within an organization has an important role to play during culture building and change.
Leaders at all levels cast a powerful shadow. The CEO, senior executives, management team members, and supervisors must continually model the desired culture and values in their actions and decision-making.
In our recently released Statement on Safety Culture, we highlighted the role of committed safety leadership as a key cultural defense in the prevention of major accidents.
We described this essential layer of protection against catastrophic events in the following way:
Safety is an organizational value demonstrated by a genuine leadership commitment and expressed by providing adequate resources, systems, and rewards to serve this end.
Senior leaders recognize that commercial goals and safety can come into conflict and take measures to identify and resolve such conflicts in a transparent and effective manner.
The strategic business importance of safety is reflected in the company’s strategy, business plans and processes.
Safety Leadership Characteristics
Committed safety leadership includes direct participation of leaders in the safety system. This means attending safety training and engaging in operational safety and management system reviews.
Committed safety leaders ensure that system safety – not just occupational health and safety performance - is part of the discussion at all high-level meetings.
When committed safety leadership exists, safety performance and oversight are considered part of the organization’s governance model. The same way that financial performance is.
Committed safety leadership is demonstrated by persistent inquiry into potential threats to operational safety and environmental protection. This analysis provides critical intelligence so that the right decisions and resource allocations can be made.
Committed safety leaders sustain a state of respectful wariness about the safety system and operation. As a result, they ensure that the right safety intelligence and data are collected and communicated to the decision-makers.
Equally important, they establish systems so intelligence about threats is disseminated to anyone who may be exposed to hazards.
They engage employees and contractors throughout the operation in order to gather the best information about potential operational risk.
Those who manage and operate the system are diligent in seeking and gathering current knowledge. This includes the social, technical, organizational and environmental factors that affect the safety of the system as a whole.
Committed safety leaders effectively communicate in their words and actions that they want to be informed of and address organizational vulnerabilities. This empowers personnel to readily report deficiencies in support of continual organizational learning and improvement.
Committed safety leaders take timely action to address hazards and deficiencies in the system. They assure adequate resources exist so that management systems, operational standards, and risk mitigation efforts are implemented and effective.
This means that leaders stand up for safety even when production may be impacted. Established recruitment, incentives and rewards systems reflect this core value.
Concluding remarks - Chair to add personal reflections
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