IMCA. HSE management - guidelines for working together in a contract environment. policy and strategic objectives

Transcription

1 review policy and strategic objectives organisation, resources and documentation HSE management - guidelines for working together in a contract environment leadership and commitment implementation and monitoring evaluation and risk management planning a u d i t Report No. 6.64/291 September 1999 IMCA

2 P ublications Global experience The International Association of Oil & Gas Producers (formerly the E&P Forum) has access to a wealth of technical knowledge and experience with its members operating around the world in many different terrains. We collate and distil this valuable knowledge for the industry to use as guidelines for good practice by individual members. Consistent high quality database and guidelines Our overall aim is to ensure a consistent approach to training, management and best practice throughout the world. The oil and gas exploration and production industry recognises the need to develop consistent databases and records in certain fields. The OGP s members are encouraged to use the guidelines as a starting point for their operations or to supplement their own policies and regulations which may apply locally. Internationally recognised source of industry information Many of our guidelines have been recognised and used by international authorities and safety and environmental bodies. Requests come from governments and non-government organisations around the world as well as from non-member companies. Disclaimer Whilst every effort has been made to ensure the accuracy of the information contained in this publication, neither the OGP nor any of its members will assume liability for any use made thereof. Copyright OGP Material may not be copied, reproduced, republished, downloaded, posted, broadcast or transmitted in any way except for your own personal non-commercial home use. Any other use requires the prior written permission of the OGP. These Terms and Conditions shall be governed by and construed in accordance with the laws of England and Wales. Disputes arising here from shall be exclusively subject to the jurisdiction of the courts of England and Wales.

3 HSE management - guidelines for working together in a contract environment Report No: 6.64/291 September 1999

4 These guidelines have been prepared for OGP by the Safety, Health and Personnel Competence Committee (SHAPCC), through its Contractor HSE Task Force, in consultation with the International Association of Geophysical Contractors (IAGC), and the International Marine Contractors Association (IMCA), who both endorse the use of these guidelines. Task Force membership R Kratsas Arco Chairman R Moschetta Arco C Preston Baker Hughes R Shields BG Plc D Laing BP Amoco ER Moir BP Amoco L Simpson BP Amoco M Alexander Chevron TL Thoem Conoco Y Guenard Elf E&P JL Monopolis Esso D Krahn IADC M Covil IAGC JC Sanchez PDVSA B Stene Saga Petroleum A Kjelaas Saga Petroleum G Kubala Schlumberger P Mann Shell R Sykes Shell Chairman G Van der Graaf Shell HJ Grundt Statoil P Guyonnet Total LA Tranie Total DK Hide OGP Secretary Following the Task Force work on developing the guidelines, Bob Moschetta undertook the role of Technical Editor to review and address comments and suggested amendments.

5 HSE management - guidelines for working together in a contract environment Table of contents Purpose/Intent... ii Description... ii 1 Introduction Background Interrelationship with other systems Overview of process 3 3 Planning Objectives Description of work Risk identification Contracting strategy Contract schedule Pre-qualification Objective Purpose and responsibilities Standard pre-qualification documents Screening From pre-qualification to selection Selection Objective Bid documentation prepared by company Bid preparation by contractor Pre-award meetings Incentive schemes for HSE Contract award Pre-mobilisation activities Objectives Kick-off meeting Pre-job audits Mobilisation Objectives General Mobilisation audit Execution Objectives Responsibilities Contractor compliance Competence assurance Inspection and HSE auditing/reviews De-mobilisation Objectives Responsibilities Final evaluation and close-out Objectives Final evaluation and report...19 APPENDIX I: HSE responsibilities for company and contractor key personnel APPENDIX II: Definition of consequence - severity of risk APPENDIX III: Contractor HSE pre-qualification...24 APPENDIX IV: HSE pre-qualification points system...29 APPENDIX V: HSE Plan guideline for major contracts...33 APPENDIX VI: HSE Plan guideline for small contracts...50 i

6 International Association of Oil & Gas Producers Purpose/Intent The overall objective of this guideline is to improve the company and contractor health, safety and environmental (HSE) performance regarding exploration and production activities. Active and ongoing participation by both the company and contractors are essential to achieve this goal. While each has a distinct role to play in ensuring the ongoing safety of all involved, there is an opportunity to further enhance the company/contractor relationship by clearly defining roles and responsibilities, establishing expectations and maintaining communication throughout the relationship. For example, one role of the company is to review and assess the contractor s HSE Management System and Programmes, while one role of the contractor is to provide HSE information as requested by the company. Often the information requests vary from company to company. By establishing a standard format, which streamlines the bidding process, company and contractor resources can be devoted to improving specific HSE issues. This guideline is designed to: 1 improve workplace safety, health and environmental performance by assisting the company and contractors in administering an effective HSE program for the contract; 3 facilitate the interface of contractor s activities with those of the company, other contractors and subcontractors. These programs should be designed to protect both company and contractor personnel from workplace injuries and illness as well as from losses associated with the incidents, while preserving the independent contractor relationship. This information is provided to assist company and contractor management to visualise the process of managing contractor HSE programs. This document is not intended to replace the necessary professional judgement needed to recommend the specific strategy to follow. Each reader must analyse their particular situation, tailor the information in this document and obtain the appropriate technical support. Due to the rapid change that is occurring in the oil and gas industry, together with the various companycontractor interface systems and management practices that are evolving, this guideline will be reviewed every two years. The Safety Health and Personnel Competency Committee will make updates and modifications based upon review. 2 assist contractors in administering programs which are consistent with the clients expectations; Description The main section of the document covers various phases of the contracting process and the associated HSE tasks and responsibilities of the company and contractors. This is an eight-phase process, which begins with planning, and ends in final evaluation and close out. The objectives, roles and responsibilities are defined for each phase. A key part of the planning phase is risk identification. It is also the prime factor in determining contracting strategy. During this step the level of risk is assessed and the most appropriate measures are identified to prevent incidents from occurring. Included in the appendices are additional tools such as checklists for HSE Plan development, severity of risk definitions, and guidelines for small and large contracts. ii

7 HSE management - guidelines for working together in a contract environment 1 Introduction 1.1 Background Within the oil and gas exploration and production industry, the pattern of use of contractors has changed significantly over the last ten years. Figure 1 shows the pattern of company and contractor hours reported to E&P Forum for the period Prior to 1985 the work force was predominately company employees. Since 1990 there has been a significant increase in the use of contractor staff, with a resulting shift in responsibility and risk from the company to the contractor population It can be seen from figure 2 that there have been significant improvements in the safety performance of both the Companies and their contractors during this period. Historically the contractor Lost Time Injury Frequency (LTIF) has not been as good as that of companies, though the gap is narrowing. The trend is encouraging, since contractor personnel generally have a higher expo- 0 Figure Company contractor hours worked (millions of hours) Manhours Contractor Manhours Company sure to risk, and it is important this trend continues, particularly as use of contractors in the E&P industry increases. These guidelines have been produced to assist management of the company-contractor interface in this changing environment and to help in the achievement of further joint improvements in safety performance. 10 Figure 2 LTIF performance of E and P companies and contractors (number of lost workday cases, including fatalities, per million hours worked) Overall Company Contractor

8 International Association of Oil & Gas Producers 1.2 Interrelationship with other systems While this document is designed to focus on improving contractor health, safety and environmental (HSE) performance, it is an extension of the previous efforts within the E&P Industry and various governmental efforts around the globe to improve overall industrial HSE performance. This effort has utilised and built upon the E&P Forum s Guidelines for the Development and Application of Health, Safety and Environmental management systems ; and the API recommended practices documents 2220 and 2221, which address contractor-client interactions and how to build an effective contractor HSE program. Additional influences are the UK Health and Safety Executive publication, Successful Health and Safety Management ; the U.S. Occupational Safety and Health Administration s Process Safety Management Guidelines; the ISO 9000 and systems; and numerous E&P Forum Member programs. All of these documents/programs utilise the same basic model for a system starting with leadership and commitment and flowing to testing and evaluation in a continuous cycle. Loss of any portion results in a system failure. This guideline follows the wording and structure used in the Forum s Guidelines for the Development and Application of HSE-MS. However, by following the guidelines in this document, a user should meet the basic requirements of various industry associations, governmental entities and the user s own requirements. These guidelines were developed for the normal activities expected in E&P operations. Each operation is, however, unique. Therefore, the user should critically evaluate these guidelines for his activities and their associated risks, and may need to adapt them for the particular circumstances of the work. This guidance is primarily developed for those responsible for contracting out activities, and personnel responsible for interface and operational oversight of contractors, their employees and subcontractors. This guidance document is mainly for activities with a medium to high risk although similar principles may be applicable to all contracted activities. These guidelines in no way supplant a host country s requirements. 2

9 HSE management - guidelines for working together in a contract environment 2 Overview of process Management of HSE in a business environment where two or more companies work together requires co-operation between them and a clear definition of the tasks and responsibilities of each of the parties. The typical phases of a contracting process are shown in Figure 3. The sectional headings addressing the phases are shown on the right. Each section describes the tasks and responsibilities showing a clear distinction between the company and contractor(s). An overview of responsibilities is given in Appendix I. Figure 3 Phases of the contracting process Joint company / contractor activities Contractor Company Description of work & risk identification Planning Contracting strategy Contractor responds to questionnaire and provides HSE information Shortlist and screen contractors Establish bid evaluation criteria Pre-qualification Contractor database Contractor prepares bid and HSE plan Bid evaluation and clarification Contract award Selection Joint completion of HSE and execution plans Pre-mobilisation Preparations Pre-mob audits Kick-off meeting Mobilisation Mobilisation Pre-execution audit Execution, supervision and reporting Monitoring, audits and inspection Execution Review of de-mobilisation HSE plans De-mobilisation De-mobilisation Acceptance of work and restored site Review Close-out Report Final evaluation and report 3

10 International Association of Oil & Gas Producers 3 Planning 3.1 Objectives The objectives of this phase are to describe the work and to assess the HSE risks associated with the work. The contracting strategy is to be selected on the nature and size of the work, and the risk involved. 3.2 Description of work The planning phase is generally a company activity, but can be enhanced by use of specialised advisers. The company is responsible for describing the work to be executed. The description should be supported by documentation in the form of standards, drawings, etc. allowing selected contractors to obtain a full understanding of the work required. The company may also specify HSE requirements to be met; examples include, but are not limited to, the following: Emissions and waste generated by the activities Timing of the activities Location of the work Requirements for site restoration Reporting requirements, applicable laws and regulations etc. Training expectations Competence assurance Materials to be utilised Alcohol and drug testing policies Medical policies Prohibited work practices. 3.3 Risk identification The company is responsible for making an initial assessment of the HSE risks involved in execution of the work. This will aid the contractor and company in developing programs and safe work practices to protect all workers. The focus of the assessment during this phase should be to evaluate the inherent hazards in conducting the work. In addition, the assessment addresses the potential adverse consequences of an accident and the potential adverse consequences of an incident to the workforce, the public, the environment, company and contractor assets and reputations. The level of risk assessed for the proposed work should be the prime factor in selecting a contracting strategy (as outlined in Section 3.4) and in determining which measures are most appropriate for consideration by the contractor to prevent incidents from occurring and to minimise the consequences of an event should it occur. The level of risk is also indicative of the amount of time and effort to be spent at later phases to provide assurance that controls are in place to reduce the risks to as low as reasonably practicable. As a minimum, a risk assessment should include consideration of the following: Nature of the work - materials to be utilised Location of the work Potential for exposure to worksite hazards (H2S, Asbestos, etc.) Potential exposure to hazards for all personnel involved in the activities Potential consequences of incidents (environmental damage, delays of project development, delay in production operations, legal claims) Exposure to negative publicity. The risks assessed can be characterised as low, medium or high in accordance with the Risk Assessment Matrix approach shown in Figure 4. Definitions for the ratings are provided in Appendix II. 4

11 HSE management - guidelines for working together in a contract environment Figure 4 Risk assessment matrix Consequence Increasing probability A B C D E Severity People Assets Environment Reputation Never heard of in E&P industry Heard of in E&P industry Incident has occurred in our company Happens several times per year in our company Happens several times per year in a location 0 No health effect/injury No damage No effect No impact 1 Slight health effect/injury Slight damage Slight effect Slight impact Manage for continuous improvement 2 Minor health effect/injury Minor damage Minor effect Limited impact 3 Major health effect/injury Localised damage Localised effect Considerable impact Incorporate risk reduction measures 4 Single fatality Major damage Major effect National impact Intolerable 5 Multiple fatalities Extensive damage Massive effect International impact 3.4 Contracting strategy One of the most important strategic contract management decisions to be made by the company is on the way in which the contractor, or alliance of contractors, is held responsible for the management of HSE. Two distinctly different modes are described below. Mode 1 The contractor provides people and tools for the execution of work under the supervision, instructions and HSE-MS of the company. The contractor has a management system to provide assurance that the personnel for whom he is responsible are qualified and healthy for the job and that the tools and machinery he is providing are properly maintained and suitable for the job. Mode 2 The contractor executes all aspects of the job under its own HSE Management System, provides the necessary instructions and supervision and verifies the proper functioning of its HSE Management System. The company is responsible for verifying the overall effectiveness of the HSE management controls put in place by the contractor, and assuring that both the company s and the contractor s HSE-MS are appropriately compatible. Selection of one of these modes is preferred. However, in certain situations it may be necessary to adopt a mixture of the two modes. This can be accomplished by following Section 3.5 of the E&P Forum Guideline for the development and application of health, safety and environmental management systems, report number 6.36/210. This section outlines the interfacing of contractors activities with those of the company and with those of other contractors as appropriate. This may be accomplished by means of a specific interface document between the company and the contractor so that differences may be resolved and procedures agreed before work commences. Examples of such situations are given below. Operations in an area where there is a limited selection of contractors able to meet the evaluation criteria. For example an alliance may have to be formed between the company and available contractors with the objective to develop, improve and implement an HSE Management System for the contractor while executing work under the management system of the company. The management system will initially aim at working under Mode 1. 5

12 International Association of Oil & Gas Producers Operations too large or diverse for a single contractor may require a number of contractors and subcontractors (a consortium) to work together under the supervision of one main contractor working for the company under Mode 2. The work is intimately associated with the activities of the company, or presents such a high risk to the company that the work is to be executed using the company s management system under Mode 1. The contractor executes most aspects of the job under its own HSE Management System; however, certain support activities such as transportation and emergency response are provided by the company. A Drilling Contractor is responsible for identifying and supplying personal protective equipment to its personnel. A Fluids Contractor designs the mud program for the Operator, with new additives included in the well plan. In this case the company has an interface procedure that details the responsibilities of the drilling contractor and requires the fluid contractor to provide chemical hazard information to the Operator and drilling contractor before shipping the materials. The interface procedure further requires the on-site fluids engineer to communicate chemical hazards during the prespud meeting. Also, when working with an alliance of contractor(s) or a consortium, it should be made clear in advance whether the alliance or the lead contractor is fully responsible for all instructions and supervision or whether that is the responsibility of the company. If the alliance or consortium is responsible, it should be made clear in the contract how this is organised. In addition, the person responsible for critical activities has to be clearly identified. Joint responsibilities should be avoided by breaking down the work into smaller identifiable activities, each with a party assigned to it with responsibility for the HSE aspects. Usually Mode 2 is preferred except in High Risk situations where the work is highly interactive with company s activities. Example: On an offshore production platform, a modification requiring welding and grinding has to be made in a hazardous area. This is considered a High Risk operation. Moreover, the essential controls and emergency response are arranged by the company. Typically Mode 1 would be used. Example: A consortium of contractors with one lead contractor is responsible for the construction of a new onshore production facility. Construction activities are always High Risk. However, until the moment that hydrocarbons are introduced, the lead contractor can be held accountable for managing all aspects of the job provided the construction contractor can demonstrate its capability to manage all HSE aspects. Typically Mode 2 would be used. Low Risk contracted operations, e.g., deliveries of non-critical materials, food, stationery, etc., are usually covered by Mode 2 whereby the contractor provides the HSE controls. Usually the company controls on such low risk activities are minimal and Mode 2 is typical. However, contractors working on company premises are normally under the control of company personnel and should follow company instructions. Issues in setting a contract strategy might include: number of contracts, contract schedule, rules and regulations, and the use of company HSE standards and/or relevant national HSE legislation and international conventions. 3.5 Contract schedule A contract schedule should be developed with due consideration of the HSE issues and deliverables involved, paying particular attention to allow adequate time for mobilisation/demobilisation. This evaluation may well highlight HSE issues that require special emphasis in later contract phases. 6

13 HSE management - guidelines for working together in a contract environment 4 Pre-qualification 4.1 Objective The objective of the Pre-qualification phase is to screen potential contractors to establish that they have the necessary experience, capability and financial viability to undertake the activities in question safely and in an environmentally sound manner. 4.2 Purpose and responsibilities The general practice in Companies for selecting contractors is through competitive tendering. In the prequalification stage, potential contractors are screened to establish that they have the necessary experience and capability to undertake the activities in question. Only those being able to demonstrate that they can manage in a fully satisfactory manner the HSE risks of the work, should be included on the pre-qualified list. A formal historical record of the HSE performance, including findings of audits and inspections, of all contractors previously employed, should be maintained by the company for use during the pre-qualification process. The pre-qualification process is a crucial step in which assurance is sought that the risks of the work will be managed. The purpose of the pre-qualification stage is for the company to agree on a list of contractors that will be invited to bid, and a list of HSE bid evaluation criteria to be met. Pre-qualification is one of the last safeguards in identifying suitable contractors. Once contractors are qualified to bid, they are eligible for award of a contract. The company contract manager is responsible for prequalification and providing assurance that the contractors invited to bid can manage the HSE risks associated with the work. 4.3 Standard pre-qualification documents Pre-qualification is usually achieved by issuing a standard format document for the contractor to complete, supported where necessary by historical performance records. It may be necessary to review the content before issue and to add, remove or emphasise requirements specific to the activity. As a means to streamline the pre-qualification process, the E&P Forum recommends that companies adopt the pre-qualification questionnaire, located in Appendix III. Requests for additional or company specific information that is not included in the questionnaire can be inserted into Section 9. By implementing this standard format, both the company and contractors can devote their resources to improving HSE performance rather than reformatting existing information into a variety of formats. Of special importance is the management by contractors of their subcontractors and the need for the main contractor to demonstrate understanding and commitment to having full responsibility in this area. Similarly, when contractors are working in an alliance or consortium, it is of special importance to demonstrate that each entity fully understands, and is committed to, the HSE management of the assigned HSE critical activities. A points system method, which minimises subjective judgement, may be used to evaluate contractors submissions. Contractors who achieve a pre-defined acceptable score will then be judged to have met the HSE pre-contract requirements. Appendix IV provides guidelines for such a rating system. 7

14 International Association of Oil & Gas Producers 4.4 Screening The screening process should be designed to assure that the contractors invited to bid can perform the work to the required HSE criteria. The general approach is to send a uniform questionnaire to all potential contractors, initially assess their HSE capabilities based on the questionnaire using an equitable measuring system (see Appendix III) and supplementing this with site inspections of current contractor work sites. Contractors which have been used by the company previously can be assessed through the use of close out reports and other historical records. A review of any potential changes to the contractor s organisation, programmes and systems should also be conducted. During pre-qualification of large contractors, especially those with many divisions in numerous countries, the use of the record of the Corporation may not be appropriate. In such a case, the focus should be on the division bidding for the work. For those contractors not qualifying, a feedback mechanism should be in place to inform them why they did not qualify and that by correcting the identified deficiencies; they may qualify for future work. Where there is a policy to encourage selected contractors to develop an HSE management Plan, and these contractors have little or no background in HSE management, then a plan to overcome the shortcomings should be developed. Such a plan may require additional company supervision, more explicit procedures or additional training. The HSE requirements should be met before work commences. The scale of the contract and the exposure must be matched accordingly. Again, the details of the program and performance of such contractors should be recorded and retained for future reference. 4.5 From pre-qualification to selection Before entering the selection phase the company should document the pre-qualified contractors and the rationale for the selection. At this time, the company specifies the minimum evidence to be produced during the selection phase by the potential contractors demonstrating that a sound Plan exists for implementing HSE management during the potential contract work to control risks to as low as reasonably practicable. This information should be prepared by the contractor as part of the HSE Plan. Appendices V and VI provide requirements for an HSE Plan for major and small contracts, respectively. Dependent on the level of risk involved in the contracted work, the company should establish yardsticks to measure the quality of the contractor s HSE Plan and criteria to be met. These measuring methods and criteria should be documented prior to the selection process in the form of Bid Evaluation Criteria. 8

15 HSE management - guidelines for working together in a contract environment 5 Selection Pre-qualification is the most important screening tool for the selection of contractors. All contractors that are pre-qualified should be fully capable of managing all HSE aspects of the job. 5.1 Objective The objective of the selection phase is to assess whether the HSE Plan and the Bid Evaluation Criteria have been met and to select, where necessary on the basis of clarification meetings, the successful bidder. 5.2 Bid documentation prepared by company The selection criteria used should consider significant aspects such as costs, technical ability, reputation, and the ability to meet schedules. The overall risk of contract and HSE management should be given appropriate weighting along with other considerations when selection criteria are evaluated. This section outlines some key considerations specific to the HSE portion of the selection process. Contractors should be given copies of the company s HSE documentation relevant to the contract. Documentation in the tender package may include: company HSE goals and objectives. company HSE-MS. definition of the scope of the HSE Plan and the known hazards to be addressed. list of HSE controls procedures and compliance issues for the contract. definition of the company/contractor anticipated interfaces, the company supervision strategy and interaction with company operations, interaction with specific company plans such as emergency response. type and schedule of company and contractor training requirements and competencies. specification of the minimum pre-execution requirements. The HSE tender documentation should be compiled, with due attention to the following: It is the company s responsibility to assure that the tender documents address the HSE requirements for the contract and that knowledge about hazards already identified by the company are passed on to the contractor. The company should not assume that the contractor knows of the hazards in the workplace, which are associated with the execution of contracted activities. The contractor has independent responsibility for his own HSE Plan, but documents should make clear provision for the company to perform HSE audits on the contractor in order to assess compliance. The documents should include provision for the company to suspend work if the contractor does not observe the HSE criteria spelled out in the contract HSE Plan or HSE Case and, in particular at mobilisation, to withhold permission to start execution and hold payments until a satisfactory preexecution audit has been achieved. Before any work is suspended, the company should liaise with the contractor to allow them the opportunity to rectify any non-conformances. Where special HSE provisions are to be provided, the documents should specify these clearly and identify who is to pay for them. Any constraints on the methods of working should also be specified. 9

16 International Association of Oil & Gas Producers In preparing their bid, the contractor should demonstrate compliance with such requirements and illustrate their process for preparing their own HSE Plan within the required framework. The actual plan will be developed after the contract is awarded. This may be accomplished by developing a system which facilitates the interfacing of company, contractor and sub-contractor activities, as described in section 3.5 of OGP s Guidelines for the development & application of health, safety and management systems. Contractors should be allowed the freedom to use industry HSE guidelines/recommended practices/standards, e.g., those of the International Association of Drilling contractors (IADC) or International Association of Geophysical contractors (IAGC), or the International Marine Contractors Association (IMCA), or of OGP, API and IMO, if they are equivalent to or exceed the company s requirements. The company should have the expertise and resources to evaluate the alternatives proposed. The tender documents should allow flexibility for the contractor to take ownership of HSE responsibilities under the contract but allow for the company to effectively manage the contract. Adequate lead times for tender preparation should be allowed to avoid compromising the establishment of a sound basis for HSE management. The company should assure that the mobilisation and demobilisation phases are adequately covered in the HSE Plan. In some instances the ability to exercise influence may be limited (for example when work is being carried out in a yard or factory where only a small percentage of the contractor s workload is for the company). 5.3 Bid preparation by contractor Some HSE requirements will have been supplied at the pre-qualification stage. An important element that the contractor should provide is their process for developing a written HSE Plan commensurate with the level of risk involved in the work. This plan will be the main element considered when carrying out evaluation of the bid and should be regarded as the top document that drives the specific HSE program for major contracts. The HSE Plan could be developed along the lines presented in Appendices V and VI. Examples of typical HSE Plans and Programs used in similar contracts in which the contractor has been involved may be submitted. The contractor s HSE Plan should clearly identify where he believes his HSE-MS interacts with the HSE-MS of the company and other contractors. A proposal should be made by the contractor on the approach to managing these interactions and the allocation of responsibilities for overlapping areas. The interface document should demonstrate that both parties have the necessary procedures (e.g., Permit to Work, Hazard and Risk Assessment, Operating Instructions, Contingency Plans) and controls in place to achieve the work program without compromising HSE performance. These systems should be harmonised where possible to minimise the potential for misunderstanding. If there is a considerable amount of time between prequalification and the bid submission, contractors should be asked to provide evidence of documenting their current HSE systems and performance. 5.4 Pre-award meetings The company s internal pre-award meetings should concentrate on reviewing the HSE program prepared by the contractor, and on assessing how effective the contractor has been in providing assurance that all hazards have been identified & that suitable controls are planned to reduce the risk to a level as low as reasonably practicable. A joint company and contractor pre-award meeting with contractors should be used to clarify and further assess the suitability of contractors HSE Plans and how that plan interacts with the HSE MS of the company and of other contractors. Following these pre-award meetings the company should assess whether the HSE Plan and acceptance criteria, as defined in Section 4.5 (Bid Evaluation Criteria), have been met. This appraisal should be documented as it is one of the crucial conditions for awarding the contract. 10

17 HSE management - guidelines for working together in a contract environment 5.5 Incentive schemes for HSE The best incentive scheme is one which values HSE performance and which results in a continuing long-term relationship between company and the contractor based on good HSE performance. The need for additional incentives should be carefully considered. To be effective a scheme should: not discourage or suppress the reporting of incidents. ensure that incentives are valued by the personnel who are in a position to influence the performance and maintain the systems. be culturally sensitive to the local environment. motivate personnel to change those behaviours that detract from HSE performance. appreciate the HSE culture of the contractor be proactive and reward effort, eg, audits and follow-up rather than after the event statistics. 5.6 Contract award Award of the contract should consider a number of areas such as technical competence, ability to meet schedule, and cost. The documented appraisal of the contractor s capability to manage HSE should be available from previous phases. This appraisal provides a go- no go criterion, i.e., if a contractor does not meet the minimum criteria, he should not be awarded a contract. Once the award has been made, joint meetings should be held as soon as possible to agree on the final HSE Plan and detailed programmes. 11

18 International Association of Oil & Gas Producers 6 Pre-mobilisation activities 6.1 Objective The objectives here are to ensure that the relevant aspects of the contract risk assessment and any other HSE aspects of the contract are communicated and understood by all parties prior to implementation of the contract. Several activities such as reviews, meetings and audits can be used. The amount of detail and effort for pre-job activities should be commensurate with the level of risk. 6.2 Kick-off meeting A kick-off meeting should be used as an opportunity for the contractor(s) to become familiar with the location, facility, personnel, and other work information. The kick-off meeting is generally recognised as an important bridging step in working together to prevent incidents and resolve any health, safety and environmental issues. The kick-off meeting should be held immediately after contract award and before the execution of any work. For a new contractor, the kick-off meeting may include the company s and contractor s local management. If the contractor mobilises locally at the work site, the kick-off meeting may be held locally. If not, it may be necessary to hold the initial kick-off meeting at the contractor s base office. This should be followed by a subsequent mobilisation of key contractor and subcontractor personnel to the work site and possibly additional local kick-off meeting(s). The local meeting(s) should be held immediately prior to the start of any work as part of the mobilisation process. The topics covered by the kick-off meetings might include: review of associated major hazards confirmation of HSE Plan to be implemented including confirmation that roles and responsibilities have been clearly defined and understood confirmation of worker competence; this includes both company and contract workers who are exposed to workplace hazards as defined in the description of work and risk assessment phases. confirmation of any HSE performance objectives and targets distribution and explanation of the company s HSE policy statement, basic HSE rules and work procedures in as far as the contractor works under the company HSE-MS confirmation of the scope and schedule of HSE activities for example; HSE meetings, audits and reviews interaction of company s and contractor s contingency plans contact with third parties to assure their role in emergency response plans is known confirmation that HSE induction and training plans are in place and ready for start up briefing of subcontractors on HSE requirements incident reporting and investigation procedures The meeting(s) may be structured as an HSE workshop, with participation by both company and contractor management. The kick-off meeting(s) should be used as an opportunity to clarify or raise new HSE issues that may not have been covered in the contract documentation. Account should be taken in the meeting discussions of the contractor s own HSE Management System, work culture and working practices. 12

19 HSE management - guidelines for working together in a contract environment 6.3 Pre-job audits The kick-off meeting may provide an opportunity to discuss the mechanisms that will be involved to certify that HSE systems are in place. It may also provide an opportunity to check the condition of the equipment and worksite in as far as is possible. It is important to keep in mind that equipment and site may still be in use for other jobs. The items listed under Section 6.2 can be parts of the pre-job audit. Supplemental audit areas might include the provision and maintenance of: equipment and site to be used for the work HSE equipment communication systems and procedures environmental protection systems health hazard identification and assessment, medical facilities, Medivac procedures. The audit should provide recommendations to be implemented prior to commencing the work. The scope and duration of the pre job audit can be determined by the company and contractor, this determination is based upon the job description and associated hazards. 13

20 International Association of Oil & Gas Producers 7 Mobilisation 7.1 Objectives The objectives of this phase are to assure that the HSE Plan is modified, if warranted, and communicated to all relevant personnel, both company and contractor. 7.2 General Prior to mobilisation, it is likely that the full HSE Plan is known only to the principal members of the company s and contractor s project management teams. During mobilisation, the HSE Plan should be communicated by the management of both the company and the contractor to all relevant personnel. In the mobilisation phase some of the principal activities are: local kick-off meeting(s) mobilisation of contract staff and equipment finalise the contractor s HSE Plan commence induction and site-specific training hold mobilisation HSE audit. During mobilisation the company and contractor assure that each sets up a method of operation that is in accordance with the agreed HSE Plan. It is at this stage that implementation of the HSE Plan by the contractor formally begins. For contracts under Mode 1 strategy, the contractor s operations should be fully compatible with the company s HSE-MS. For contracts under a Mode 2 strategy, any HSE Plan requirements should be integrated into the contractor s HSE-MS. The company and contractor should confirm that each has deployed his supervisory staff and is implementing the agreed-upon briefing and training for his supervisors and employees. Depending on the circumstances, additional supervisory staff from the contractor may be required to allow rapid set-up and implementation of the HSE Plan. The company and contractor may want to have additional staff available to verify that the HSE Plans are fully implemented. This can be accomplished by a joint company/contractor HSE field review or audit. During the initial part of the mobilisation phase all key personnel assigned to the project should attend an HSE orientation program that should be used to communicate the HSE Plan and any other significant HSE aspects of the contract. Progress meetings should then be used as a formal method of reviewing HSE implementation, along with frequent walk-throughs by company personnel. Aligning the various interests and areas of responsibility requires good working relationships between the company and contractors, among contractors and between contractors and sub-contractors. This is particularly true if the subcontractor activities are difficult to monitor (e.g. distributed work groups, transportation). Once mobilisation activities have commenced, the company should begin monitoring of the contractor s pre-execution activities to assure the HSE Plan is implemented. 14

21 HSE management - guidelines for working together in a contract environment 7.3 Mobilisation audit In the final stages of the mobilisation, an audit or review against the project s HSE Plan should be completed to determine whether the contractor has achieved the necessary targets stated in the HSE Plan and whether mobilisation can be considered complete. This can be accomplished by a joint company/contractor HSE field review or audit. Achievement of HSE Plan targets for this stage should represent the first milestone of the project. Usually, the extent of the audit depends on the level of risk associated with the activity. For a relatively low risk contract, an audit may be conducted by means of a simple checklist. For high-risk contracts, a more analytical approach may be used. If the audit proves to be unsatisfactory, then the status of the contractor s progress should be carefully reviewed. The options available at this stage are: Minor deficiencies: the contractor should be requested to implement corrective action and the audit repeated. It may be possible to allow this to take place in parallel with initiating the execution phase. Serious omissions: the option of withholding permission to proceed or even terminating the contract may be necessary. To minimise the possibility that the company could be perceived as assuming responsibility for HSE supervision, the results of the mobilisation audit are documented and processed through the contractor s HSE-MS. The mobilisation audit usually is structured against the elements of the HSE-MS or, more specifically against the HSE Plan elements (as outlined in Appendix V). 15

22 International Association of Oil & Gas Producers 8 Execution 8.1 Objectives The objectives of this phase are to assure that the work to be performed is conducted according to the agreedupon HSE Plan, and that additional HSE needs, identified during the work, are properly addressed. 8.2 Responsibilities The nature of the work determines the level of supervision necessary. For example, within or in close proximity to operating plant, hazardous area zones or acknowledged high risk operations, more direct company supervision may be required than on a new construction site or the contractors own premises, i.e. MODU, lay barge, etc. Only in particular circumstances should contractors be directly supervised because too much instruction/ direction from the client tends to relieve the contractor of the responsibilities stipulated in the contract. Where responsibility for supervision rests with the contractor, the company s role should be to monitor compliance to contractual terms and systems defined within the contract. Unless the contract holder has a permanent presence on site, it is usual to appoint representatives from line management to monitor and verify that contract HSE obligations are being met. The contract holder and representative should have access to specialist HSE advice where needed, but accountability for contract HSE lies with the contract holder. Responsibility may be delegated to the representative, but accountability needs to remain with the contract holder. 8.3 Contractor compliance The roles and functions of the company contract holder includes assurance of: the contractor s line management commitment to HSE issues compliance with all HSE related clauses in the contract and the HSE Plan the existence of contractor s internal HSE control system the contractor s monitoring of the quality, condition and integrity of his Plan equipment and tools the contractor s holding of toolbox and regular HSE meetings contractor s implementation and participation in emergency exercises and drills proper management of HSE risks which arise from changes to the Plan compliance with incident and near-miss reporting, investigation and follow-up. the resolution of interface problems between contractors. An HSE audit and review programme should be prepared, stating specifically what is expected of the company contract holder in ensuring that the HSE Plan is finalised and adhered to, together with details of how the performance of the contractor is to be measured. 16

23 HSE management - guidelines for working together in a contract environment 8.4 Competence assurance During execution of the work, the company contract holder must monitor the continued competence of the contractor. This refers to any associated training commitment undertaken. Where necessary, the company should also determine if any additional competence assurance is needed as a result of local circumstances. Monitoring should include a verification that the contractor complies with his management system that may include: competence and close monitoring of the replacement of personnel provision of the necessary induction courses training of contractor personnel in job related activities and procedures completion of all agreed-upon HSE training, including any specified statutory training requirements availability of HSE documents, instruction and information leaflets with special attention to use of local language reinforced with simple visual messages. 8.5 Inspection and HSE auditing/reviews Inspections and audits provide the methods for monitoring contractor HSE activities. Regular inspections by company representatives provide a means of checking compliance with contract requirements. The frequency of such inspections/verifications depends on the size of the work and the risks involved. Auditing provides the more formal and comprehensive assessments of adherence to the HSE Plan. Inspections and audits should be performed by both contractor and company. Joint inspection/audit programs may have the advantage of aligning sometimes divergent objectives, enhancing common understanding and promoting constructive participation. Findings of inspections and audits should be shared between client and contractor with positive commitment from both parties to use the findings for improving performance. 17