Session No.

608-a

Business Partners Safety: Obligation or Opportunity?

Ali H.Al-Failakawi
Team Leader HSE (S&EK)
Kuwait Oil Company, Kuwait
Bala Siva Srikanth Adivi, CSP, CMIOSH
Senior Safety Engineer HSE (S&EK)
Kuwait Oil Company, Kuwait

Introduction
Business partners play vital role in achieving world class HSE performance in any industry.
Health, Safety, Environment is one of the key strategic objectives of all organizations nowadays;
hence, it is of paramount importance to move together with business partners to achieve business
objectives with world class HSE Performance. In order to promote safe work environment at the
contractors work sites, full cooperation and commitment of contractors workers as well as
contractors management are absolutely essential, supported by operator organizations (termed
as operators herein after) leadership and commitment. (The words business partner and
contractor are used in this paper, however, the interpretation of both the words leads to one
meaning only)
The Industry continues to encounter new horizons and environmental pressures that are
changing and challenging day after day. Significantly, HSE performance is becoming one of the
corporate values, especially as the oil and gas industry plays a key role in addressing some of
most important HSE issues of present and future times. This is a more challenging especially
when diversified workforce (working personnel are from diversified countries) is engaged posing
a great challenge in getting the message through to achieve world class HSE performance, which
is beyond compliance.
Organizations (operators) bring business partners on board to achieve its business
objectives, whilst ensuring business continuity and preventing damage to people, property and the
environment. Progressing in the path to achieve business objectives, every organization aims to
prevent all contractor accidents. The inherent risks in the type of work activities involved in a
project are considered, evaluated and controlled together with effective means of ensuring that
contractors hired have HSE knowledge and commitment and must have undergone training.
However, after number of accidents across the world, the concept of business partners
safety or HSE is considered only for procedural purposes by some organizations. Even this may

be possible to see the organizations view this concept as an obligation or legal nuisance for
adherence and some considers an opportunity to move along to establish and achieve world-class
HSE performance through continual improvement.
Understanding the difference between compliance and achieving HSE excellence truly
requires Organizations commitment and true leadership towards HSE. The later is always the
best with a clear intention of aiming to create safe working sites (with safe behaviors which in
turn provide injury free work places) and achieving world-class safety performance and beyond.

Business Partners (Contractors) Safety

Believing Contractors Are Partners in Business?

The use of contractors in the industry, particularly in Oil & Gas is commonplace. Many
organizations turn to contractors to supplement their maintenance/project and other staff.
They are also used for specialist tasks, often involving hazardous activities. Hence,
apparently, contractors performance in the way attaining organizational goals and targets
plays vital role to reach business objectives in timely manner. If this performance is achieved
with excellent HSE performance, that would be a credit to both operators as well as the
contracting company. Else, it would turn to be an unpleasant performance which no one
anticipates and expects.

Why Manage Contractors?

Our organization has crossed millions of man hours without a Lost Time Incident but we know
we need to sustain this performance. Weve got HSE Management Systems for employees, but
they dont always get passed on to contractors. The contractor coming in to execute the job in our
industry doesnt know/understand hazards and risks associated with Oil & Gas business/activities
and often it is observed that implementation of our HSE Management System poses some gaps
-Production Manager of M/s XYZ
Operators and contractors need to provide safe work places and to protect the workforce.
When they work together to improve safety (HSE), both benefit. Both operator and contractor
management commitments are essential in minimizing accidents/incidents and preventing injuries
and illnesses. Management commitment begins with the operator and contractor providing the
resources necessary for implementing and maintaining an effective safety program.
Operators and contractors benefit mutually when they work together to enhance the
management of related safety (HSE) programs. These advantages can include:

HSE expectations and capabilities are clearly understood before the work begins;
improved HSE performance;
better working relationship between operator and contractor;
improved HSE training for both operators and contractors; and
Improved productivity, reliability and efficiency.

Definition of Contractor
A contractor is an individual, partnership, firm, or corporation that is hired to do a specific job or
service or to provide contract employees personnel to an operator or contractor and is also the

individual, partnership, firm, or corporation retained by the operator to perform other work or
provide supplies or equipment.
Sometimes, more than one contractor is on site to perform either one job or different jobs.
Organization need to think about how their work may affect each other and how they interact
with operator activities. Clearly, in these circumstances there are more chances of something
being overlooked.

The Costs of Getting It Wrong

No organization plans to have an incident. No one wants to become ill as a result of their work.
Yet there are number of examples of different kinds of incidents that occurred across the globe.
All these incidents were costly in many ways, which may be insured or uninsured:

Loss of human lives

Loss of property and irreversible damage to environment
Loss of production time
Reputation and many direct and indirect losses
Financial loss for restarting the business process, (maybe) compensation to pay and other
legal penalties.

Business recovery can take significant time and may also involve civil law claims
sometimes. Insurance premiums may increase, or cover might be refused because of a poor
claims record.
Some employees normally say It cant happen to us or Why should we think about all
such things weve never had an incident with a contractor! .this implies that organization is
going ahead in landing in trouble. Then it could be too late.

Legal Aspects
Different legislations and regulations exist in different countries cover various aspects and
requirements for contractors safety. These clearly state that every organization who employs
contractors need to understand the law. Contractor has to work safely and owe a responsibility to
operators. Communication and cooperation are needed on both sides that require active,
committed management and leadership.

Hand in Hand
If the relation between the operator and contractor goes hand in hand, the results will be positive.
Some of the common HSE objectives are:

Effective coordination to create a better partnership

Duty of care demonstration by the leadership
Improve the image of the company (Both the operator & business partners)
Compliance to operator HSE management system and business partners through proper
bridging/interface document(s).

Management of HSE in a business environment where operator and one or more

contractors work together requires cooperation between all parties and a clear definition of the
tasks and responsibilities of each of the parties.
The relationship between operator and the business partner workforce not only relies on
direct supervision, but also the ability to influence and enforce HSE expectations underscoring
the importance of HSE Management System integrated with additional tools such as Behavioral
Based Safety. The degree to which a contractor will perform safely/achieve good HSE
performance or contributing to the operator HSE performance almost always is proportionate to
the emphasis the operator places on HSE. The stronger the support, understanding and
encouragement, the better able the contractor will understand and meet HSE performance
expectations.

Contractor HSEMS
Contractors HSE performance is not only key to their own performance, but also operators HSE
performance and their capabilities and competencies to perform work on its behalf shall be
assessed. In the progressive line of achieving objectives, every organization will work together as
partners to ensure HSE requirements are fully implemented. Operator shall monitor and audit
contractors performance and ensure expectations are understood and implemented. These
expectations shall be part of contractor HSE Management system and its related processes which
provide an opportunity to set clear contractor expectations for alignment with operators
objectives and targets. The intent of this kind of system and its related expectations should
encompass all potential loss to people, property, environment and reputation.
Both the operator and the contractor they do have their individual responsibility towards
HSE. The commitment to safety (HSE) has to be emphasized by the owner by practice by its own
management and employees at all levels. Though the contractor has to abide by Contract terms
and conditions, however, with respect to HSE, measures must be in place not only to meet
minimum legal compliance requirements, but to the requirements of HSE Management System.
The contractor HSE Management System shall be applied uniformly across the
organization for effective management. The following key components are to be considered.
1. Contractor assessment followed by pre-qualification process and implementation of
documented Contractor Qualification Certificate.
2. The team which actually supervise contractor activities is in the best position to foster,
supervise and monitor contractor HSE approach and performance improvements by:

Ensuring that HSE is not compromised for any reason.

Ensuring to see that thorough knowledge of HSE practices and procedures is there and
be able to continually use this knowledge to prevent unsafe acts and apply professional
judgment within this framework.
Being responsible for the application of safe work practices through applicable HSEMS
procedures
Having working knowledge of the HSE performance of all contractors being supervised.

Every organization has its own independent HSE Management system in which contractor
HSEMS is a subset. In all those systems, the objective of every organization is to execute
contractors activities in a safe manner. Systems shall be developed, implemented and reviewed
at periodic intervals to ensure continual performance exists. As an illustration, one such example
with different steps is provided below:

Project Pre-Planning
As a critical first step, project pre-planning is performed to clearly identify projectspecific HSE risks and compliance requirements associated with the proposed project, job
or tasks to be performed by the contractor. A project pre-planning assessment will need
to consider HSE impacts to existing operations and the contractor workforce besides
regulatory review to understand compliance requirements.
Contractor Pre-Qualification
Involves evaluating prospective contractors ability to meet HSE performance
expectations and requesting bids from only those that are assessed as being able to meet
the HSE requirements.
Request for Proposals
The package shall be designed to communicate HSE performance requirements
associated with proposed scope of work.
Contract Selection & Award
Involves selecting the best contractor from the list of HSE pre-qualified bidders. HSE
requirements and components of contractor pertaining to the scope of work must be
finalized prior to start of activities, i.e., contractor HSE Plan.
Contractor mobilization and execution
All HSE performance requirements shall be incorporated within the contract signed
between the operator and the contractor. All applicable HSE requirements defined within
the contract shall be met before work begins, including, but not limited to, the
requirements described in the contractor HSE plan with agreed interface aspects.
Project Kick-off or Pre Job activities
Prior to the commencement of work, review meeting shall be held between the operator
and the contractor to review project requirements, policies and procedures.
Contractor Oversight (Work in Progress)
System and procedures shall exist to ensure contractor oversight through different active
monitoring programs. Involves application of business controls to ensure the HSE
objectives & targets are achieved.
Contractor HSE Performance evaluation
Performance shall be reported and evaluated at regular intervals.
Contractor Demobilization and close out.
Involves looking back over the job to identify areas for improvement in both operator and
contractor HSE management.

Beyond Compliance
Many organizations operate at a reactive level and concentrate only on maintaining compliance
with the required regulations. Achieving compliance with respect to regulations may not

necessarily put Organizations HSE performance in better shape; however, this will end up
meeting minimum requirements without any continual improvement.
To reach and sustain higher levels of performance, it is essential to implement a holistic,
integrated processes and management systems focusing on active level besides process safety
management and behavioral improvement process, i.e. Behavioral Based Safety approach. This
includes building a common HSE culture, which allows everyone at site to continually work
towards a common and shared vision of excellence with objectives and goals that support their
vision.
Following are few instruments through which beyond compliance can be ensured:

Leadership, Commitment & Accountability

Organization, Resources & Training
Risk Management
HSE Plan & Procedures
Implementation & Monitoring
Continuous Assessment
The above can be further expanded from the apex model illustrated in Exhibit 1.

ACT

PLAN

CHECK

DO

Exhibit 1. Apex model

Plan - Before undertaking HSE-related activities, identify applicable goals, regulations and
requirements, allocate sufficient resources, train personnel, define roles and responsibilities,
and establish improvement goals and targets.
Do - This component addresses the implementation of practices, programs and procedures
related to HSE performance.
Check - In tandem with implementation activities, monitor and measure HSE performance,
report all incidents, and correct identified problems.
Act - Periodically review the entire system and report results to senior management.

Way Forward
Many organizations with strong safety (HSE) programs often are uncertain how to bring
contractors to a similar level of safe behavior or HSE performance. It is evident and experienced
that inadequate safety (HSE) of contractors can have severe consequences, which vary from
direct costs to indirect costs.

Organizations (operators) should ensure that there is appropriate balance between

identifying personal safety hazards to process safety hazards... from both organizational business
processes as well as contractors activities. Both these are practically achieved by ensuring the
appropriate safety (HSE) programs integrated with HSE management systems. System shall be
defined in such a way that contractors safety (HSE) shall be given due consideration at all phases
of work/activities.

Conclusion
Creating worksite of safe behaviors which further lead to Injury prevention is stepping path to
enhancing safety (HSE) performance. Aside from being the right thing to do, a properly
implemented HSE Management System gives a change for the management to view safety as a
natural cost of doing business with a built-in return on investment.
Oil & Gas industries (or every industry as a whole) must manage safety (HSE) in a
systematic way to prevent incidents. contractors safety (HSE) shall be considered as
Opportunity, but not Obligation. contractors HSE Management system shall be implemented
through operators HSE Management system through interface documents. To succeed in
eliminating unsafe behavior(s) as well as incidents, organization(s) shall focus in a holistic view
giving due emphasis on contractors safety (HSE) with additional measures such as Effective
integration of contractors in HSE, implementation of BBS (behavioral-based safety),
implementation of risk management and other applicable measures as well.

Bibliography
Health and Safety Executive (HSE) (UK). 2013 Using Contractors: A Brief Guide. Liverpool:
HSE (http://www.hse.gov.uk/pubns/indg368.pdf).
_______. 2011. Managing Contractors: A guide for employers. Liverpool: HSE
(www.hse.gov.uk/pubns/books/hsg159.htm ).
Heinrich, H.W. 1969. Industrial Incident Prevention: A Scientific Approach. New York:
McGraw-Hill.
International Association of Oil & Gas Producers (OGP). Report 423, HSE Management
guideline for working together in a contract environment. London: OGP.