ARCHIVED - Session 2 - The Role of Leadership - Terrance Kutryk, CEO - Alliance Pipeline

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Safety Forum - June 5-6, 2013

Terrance Kutryk, CEO
Alliance Pipeline

Do you measure safety culture? If you do, high level, how do you do it?

Yes we do. We measure our safety culture as an aggregate of various factors, imputing our performance by tracking identification of current and potential safety problems and monitoring our performance to eliminate those problems. We do this through measuring incident investigations and near misses, corrective actions taken and hazard and incident reports. We also use other data that becomes available, such as the findings of a safety culture survey that the Interstate Natural Gas Association of America (INGAA) recently carried out.

Are there any specific collaborative initiatives (knowledge sharing, R&D, etc.) across companies or across industries?

Yes. A lot of good - work goes on through industry associations like the Canadian Energy Pipeline Association (CEPA) and Interstate Natural Gas Association of America (INGAA), both of which Alliance supports. CEPA’s Integrity First® program takes a management system approach to improving pipeline industry performance in a variety of areas, including safety. Another example is the INGAA’s pipeline safety task force which, among other things, is working to tackle issues related to risk management, aging infrastructure, emergency preparedness and response, and research and development.

Alliance also participates in standards development organizations and research/technology development collaborations. Our involvement ranges from leadership to participation on steering and technical committees. Focus areas for these collaborations can include line pipe specification development, pipeline coating and materials, integrity management and management systems and damage prevention as well as design and construction.

Is a zero risk or zero incidents something that is communicated to the public?  It sounds like a dangerous precedent

Even though it has been publicly communicated only recently, in essence this has always been the broader oil and gas industry’s goal. Every year the industry makes progress toward this end. We should always strive for zero incidents.

Mr. Ebel & others: what are your thoughts on moving beyond using the traditional lagging metrics primarily for measuring safety performance?

We believe that both lagging and leading indicators have a role in measuring and monitoring safety performance. While industry has traditionally focused on lagging indicators for benchmarking of safety performance, we believe there would be value in a collaborative industry effort to also identify key leading indicators that support proactive safety performance.

The objective is to achieve 0 incidents. Is there a desired timeline on this?  If not, should there be so that this is a very tangible goal?

See below.

Re: next question, the goal is 0. The objective should be getting as close to 0 as possible so annual targets and measures are needed to be tangible

The goal is to achieve zero incidents. We set targets for activities and initiatives we believe will drive continual improvement toward a zero incident outcome. Example measures include the completion of corrective actions for all incidents with a potential for high safety consequences, or measuring completion of training for safety-critical positions. Our goal is always zero incidents.

Does the goal of zero meet the requirements of goal setting science i.e. realistic and achievable?

As stated above, zero incidents is a conscious commitment to a desired outcome. Zero incidents is a realistic and achievable goal, even though it is difficult to achieve. We set out to achieve this through actions that include safety investment, proactive safety culture, training, processes and open communication. By making the commitment, industry continues to improve and get closer to meeting this goal.

All of you are from finance backgrounds-that doesn't sound like a background for an operations, safety focus. How did you get to safety first?

While finance is a part of my education, my background includes considerable experience in a number of areas, including pipeline operations. As an aviator, I have experienced how safety and safety management systems are continuously emphasized and an important component of recurrent training. Nothing is more important than safety. This is my focus as CEO, and in that capacity, I ensure it is also the focus of our people.

While zero is well intentioned is it eroding trust and belief at the worker level?  Is it driving wrong types of behaviors in the company?

There is a danger that holding people accountable for zero incidents could incent a behavior of non-reporting and lack credibility, which is counter-productive. To ensure the zero incidents goal is seen as realistic and achievable, leadership must resist the temptation to “measure for zero,” and instead measure the tangible, proactive efforts of the organization to continuously improve safety performance. In this way, the organization can make the connection between a positive safety culture and the impact it has on reducing and ultimately eliminating incidents as an outcome.

Learning from incidents has been a key driver to assessing our proactive and reactive risk management processes and the effectiveness of our pipeline integrity program, operations, control centre practices as well as outreach to key stakeholders. However, when learning from incidents, it is important to view these through the lens of a “just culture” where we place less emphasis on events and errors, focusing instead on the management of behavioral choices that lead to negative outcomes.

How do you know you have a positive safety culture?

There is no “one-size-fits all” when it comes to a positive safety culture. A positive safety culture begins with a commitment to safety excellence. It relies on having policies in place that set clear safety expectations, having a company-wide approach to identifying and minimizing risks, monitoring safety performance, and keeping safety top of mind through regular and robust safety communication.

I believe that Alliance does these things very well. Our policies empower and expect people to be safe. We have a robust process for risk identification and mitigation -at all levels of the company. We continuously monitor for “weak signals” -even small events are taken very seriously, and we use the learnings to continuously enhance our practices. Finally, we foster an open safety dialogue -from the top of the organization and throughout. These things collectively help us to guard against complacency, by keeping safety top of mind in everything that we do.

Who can provide a credible scientific voice on the industry practices and help influence public perceptions?

The more someone is seen as a credible, non-partisan third party information source, the greater their credibility with the wider public. Industry associations, safety experts and academia all play a role in providing a credible voice with respect to our industry’s safety efforts. However, ultimately the most credible and scientific evidence is our own industry’s safety performance -and that is up to all pipeline companies.

How do you manage the indicators that may conflict with safety performance such as cost reduction?

Financial return and safety are not mutually exclusive. It is of fundamental importance to recognize that, more than an expense, safety is an investment. A serious pipeline failure is extremely unlikely, but the consequences could be high. We must be mindful of risks and not undervalue them. We are committed to continuous risk management. Only when leaders manage business on a fully risk-adjusted basis do they generate quality economic returns.

Where does PAS-55 or ISO-55000 fit into the CEO's perspective of the future - management systems, including safety and ability to audit?

Alliance’s management system takes an integrated approach and encompasses critical aspects of our business, especially safety and integrity management. It is also aligned with the current NEB Management System and Protection Program expectations. Our system incorporates leadership accountability, comprehensive risk management, effective data management systems, key performance measures and continual improvement. Alliance’s continual improvement process incorporates review and implementation of industry best practices, such as PAS-55 or ISO-55000, to optimize lifecycle management of assets and ensure safety performance.

Do you believe the integration of corporate communications into safety practices would benefit a company (internal/external communication)?

Yes - open communication and dialogue are key to safety. At Alliance, we empower people to speak up when they see a potential safety issue. When a safety issue is identified, the issue, along with corrective action, is communicated by email to every single person in the entire company. That is powerful. These are just a couple of ways that we stimulate active safety communication. Externally, it is vitally important for industry to establish and maintain credibility with our stakeholders and we must do this through quality and meaningful communication.

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