Passionate About… Risk

19 November 2008 (Last Updated November 19th, 2008 18:30)

Hugh Williams, chief executive of the International Marine Contractors Association (IMCA), continues his look at topics that raise passions among offshore specialists.

Passionate About… Risk

With a new James Bond film on general release, it is not surprising that my mind has turned to risk. Not the sort of devil-may care risks that 007 thrives on, but rather risk reduction, management, analysis, assessment and exposure.

These may, at first glance, be seen as topics unlikely to engender passion, but good risk management equates to greater efficiency and safety – the two cornerstones of effective offshore operations. And yes there is sometimes the bonus of exploring risk and reward… I already feel a new passion coming on.

It is imperative that those involved in installing and maintaining the offshore infrastructure for oil and gas exploration or production strive for the highest possible standards with a balance of risk and cost. The factors in the mix are health and safety, technology, quality and efficiency as well as environmental awareness and protection.

Self regulation is the key

Trade associations do not regulate as legislators do. They provide guidance to members and work to update and introduce new guidelines wherever there appears to be a need.

"If an industry does not self regulate then an external body will impose its own directives."

Members working to those guidelines are self regulating, rather than looking to clients or governments for rules. Self regulation is the logical result of action by industry participants to address a number of concerns.

If an industry does not self regulate then an external body will impose its own directives, either in the form of governmental or client requirements. If this happens, contractors face the prospect of each client and each government stipulating its own varying requirements, causing considerable strain on each contractor and extra unnecessary costs.

The strain includes finding out the different requirements, tendering with allowance for them and then complying with them for each project. For contractors who often work for different clients around the world, this imposes a potentially repetitive, expensive and avoidable burden.

In a mature, responsible industry such as ours, self-regulation is a reasonable approach with proven benefits for contractors, clients, governments and regulators. Of course, the spread of guidelines that IMCA produces becomes ever-greater as more members join the Association and IMCA produces more documents to meet industry needs.

In addition the penetration of the documents increases as clients start to dictate them as a condition of contract.

As the industry moves into new geographical zones where often there are few detailed government requirements for marine construction, IMCA guidelines have been used as an available, acceptable reflection of good practice for the government or local client to use without having to start from a blank sheet of paper. A recent membership study revealed that a high proportion of our 550 member companies in 52 countries are IMCA members specifically because of the guidance documents we
publish.

Ensuring ongoing safety records

One area of pressing concern for the $20bn per annum offshore marine contracting industry is expansion. As I have mentioned in previous features, the offshore fleet is about to become physically larger in number and size, as well as more sophisticated.

If ever there was an example of the need for ensuring that risks are assessed it is within this scenario, where skills and safety levels need to match the sophistication of the new-look fleet. To operate the new fleet, the industry will need to recruit a wide range of new workers.

‘Zero injuries’ is the human holy grail of the offshore industry. Therefore all new and established employees must be capable of absorbing the available knowledge and taking on board industry safety objectives. Training must continue across the board to keep them safe.

‘Zero incidents’ is the goal for the new vessels. The published IMCA documents on new vessel/equipment specifications, trials and auditing will be invaluable for both the vessels and staff, as they are well founded in the lessons learnt in the past.

Bring these together and they result in ‘zero risk’. The industry must formulate plans to ensure that the enlarged offshore fleet can operate optimally – and safely - thanks to adequate risk assessment and management.

IMCA’s work

On behalf of our member companies we strive to help through a wide range of activities, including the publication of good practice guidelines. Nearly every one of these guidance documents discusses risk. We also publish position papers, safety flashes and safety statistics – all aimed at improving safety and efficiency.

On the commercial side, we have published two documents: IMCA Contracting Principles and Identifying and Assessing Risk in Construction Contracts plus standard contracts for specific work. They discuss contractual issues and share objectives with insurers that include risk reduction, clarity of responsibilities and cover, as well as avoiding overlaps and gaps.

Our annual seminar and safety seminar are opportunities for those working in the industry to get together and discuss balancing risk, cost and efficiency. This year’s annual seminar, the fifteenth in the series, was held in Kuala Lumpur in November.

Its theme was the global alignment of marine operations and it highlighted the need for common approaches worldwide. Members and non-members alike, what the people actively involved in offshore operations discuss helps to determine the IMCA's future work programme. The word "risk" came up time and time again.

We’ll be exploring risk in even more detail at our safety seminar in Houston next spring and finding out how a rodeo rider (with an approach somewhat akin to James Bond) approaches risk assessment and manages the outcome.

"One area of pressing concern for the $20bn per annum offshore marine contracting industry is expansion."

As a sign of our strong belief that risk assessment can improve communications between supervisors, their teams and external contacts leading to improved safety, we have recently produced a risk assessment DVD dubbed in Arabic, French, Indonesian, Italian, Malay, Brazilian Portuguese, Russian, Latin Spanish and Tagalog as well as English.

Risk assessment is a crucial process and the more it is used, the better we will be at controlling hazards. In turn this should result in fewer injuries to people, less damage to equipment and a reduction in harm to the environment. Our multi-language DVD sets out how risk assessment can improve vital communications.

We should never underestimate the importance, in safety terms, of communicating information about a task, its hazards and how they are to be controlled. There are hazards everywhere and the role of both team risk assessment and personal last-minute risk assessment can never be over-emphasised, both on new large challenges and on smaller jobs undertaken hundreds of times before.

We have to remember that if James Bond undertook adequate risk assessment and management there would be no nail biting film but in the offshore industry nail biting roller coaster rides are firmly out and risk assessment and management firmly in.