Financial Times: Baker report: Key findings: Edited extracts of the main findings of the Baker report into the safety of BP’s US plants

Published: January 16 2007 15:33 | Last updated: January 16 2007 17:51

CORPORATE SAFETY CULTURE:

Process safety leadership: The Panel believes that BP has not provided effective process safety leadership and has not adequately established process safety as a core value across all its five US refineries.

While BP has an aspirational goal of “no accidents, no harm to people,” BP has not provided effective leadership in making certain its management and US refining workforce understand what is expected of them regarding process safety performance.

BP did not emphasize process safety. BP mistakenly interpreted improving personal injury rates as an indication of acceptable process safety performance at its U.S. refineries.

BP’s reliance on this data, combined with an inadequate process safety understanding, created a false sense of confidence that BP was properly addressing process safety risks.

The Panel further found that process safety leadership appeared to have suffered as a result of high turnover of refinery plant managers.

As discussed in this report, BP has undertaken a number of measures intended to improve process safety performance. The Panel also recognizes that BP executive management and corporate-level management have more visibly demonstrated their commitment to process safety in recent months.

Employee empowerment: At Texas City, Toledo, and Whiting [refineries], BP has not established a positive, trusting, and open environment with effective lines of communication between management and the workforce, although the safety culture appears to be improving at Texas City and Whiting.

Resources and positioning of process safety capabilities: BP has not always ensured that it identified and provided the resources required for strong process safety performance at its US refineries. Despite having numerous staff at different levels of the organization that support process safety, BP does not have a designated, high-ranking leader for process safety dedicated to its refining business.

Corporate management mandated numerous initiatives that applied to the US refineries and that, while well-intentioned, have overloaded personnel at BP’s US refineries. This “initiative overload” may have undermined process safety performance at the US refineries.

Operations and maintenance personnel in BP’s five US refineries sometimes work high rates of overtime, and this could impact their ability to perform their jobs safely and increases process safety risk. BP has announced plans to increase both funding and hiring at its US refineries.

Incorporation of process safety into management decision-making: BP did not effectively incorporate process safety into management decision-making. BP tended to have a short-term focus, and its decentralized management system and entrepreneurial culture have delegated substantial discretion to US refinery plant managers without clearly defining process safety expectations, responsibilities, or accountabilities.

BP has not demonstrated that it has effectively held executive management and refining line managers and supervisors, both at the corporate level and at the refinery level, accountable for process safety performance at its five US refineries. It appears to the Panel that BP now recognizes the need to provide clearer process safety expectations.

Process safety cultures at BP’s US refineries: BP has not instilled a common, unifying process safety culture among its U.S. refineries. Each refinery has its own separate and distinct process safety culture. While some refineries are far more effective than others in promoting process safety, significant process safety culture issues exist at all five US refineries, not just Texas City.

PROCESS SAFETY MANAGEMENT SYSTEMS

Process risk assessment and analysis. While all of BP’s US refineries have active programs to analyze process hazards, the system as a whole does not ensure adequate identification and rigorous analysis of those hazards. The Panel’s examination also indicates that the extent and recurring nature of this deficiency is not isolated, but systemic.

Compliance with internal process safety standards. BP’s corporate safety management system does not ensure timely compliance with internal process safety standards and programs at BP’s five US refineries.

Implementation of external good engineering practices. BP’s corporate safety management system does not ensure timely implementation of external good engineering practices that support and could improve process safety performance at BP’s five US refineries.

Process safety knowledge and competence. BP has not effectively defined the level of process safety knowledge or competency required of executive management, line management above the refinery level, and refinery managers.

BP has not adequately ensured that its US refinery personnel and contractors have sufficient process safety knowledge and competence. The information that the Panel reviewed indicated that process safety education and training needs to be more rigorous, comprehensive, and integrated.

At most of BP’s US refineries, the implementation of and over-reliance on BP’s computer based training contributes to inadequate process safety training of refinery employees.

Effectiveness of BP’s corporate process safety management system. BP’s corporate process safety management system does not effectively translate corporate expectations into measurable criteria for management of process risk or define the appropriate role of qualitative and quantitative risk management criteria.

Material deficiencies in process safety performance exist at BP’s five US refineries. Some of these deficiencies are common among multiple refineries, and some of the deficiencies appear to relate to legacy systems in effect prior to BP’s acquisition of the refineries.

BP appears to have established a relatively effective personal safety management system by embedding personal safety aspirations and expectations within the U.S. refining workforce. However, BP has not effectively implemented its corporate-level aspirational guidelines and expectations relating to process risk. Therefore, the Panel found that BP has not implemented an integrated, comprehensive, and effective process safety management system for its five US refineries.

PERFORMANCE EVALUATION , CORRECTIVE ACTION AND CORPORATE OVERSIGHT

Measuring process safety performance. BP primarily used injury rates to measure process safety performance at its US refineries before the Texas City accident. Although BP was not alone in this practice, BP’s reliance on injury rates significantly hindered its perception of process risk.

BP tracked some metrics relevant to process safety at its US refineries. Apparently, however, BP did not understand or accept what this data indicated about the risk of a major accident or the overall performance of its process safety management systems. As a result, BP’s corporate safety management system for its US refineries does not effectively measure and monitor process safety performance.

The process safety performance metrics that BP uses are evolving. BP now monitors at the corporate level several leading and lagging process safety metrics. BP also is working with external experts to review process safety performance indicators across the company and the industry.

Incident and near miss investigations. Although BP is improving aspects of its incident and near miss investigation process, BP has not instituted effective root cause analysis procedures to identify systemic causal factors that may contribute to future accidents.

BP has an incomplete picture of process safety performance at its US refineries because BP’s process safety management system likely results in underreporting of incidents and near misses.

Process safety audits. BP has not implemented an effective process safety audit system for its US refineries based on the Panel’s concerns about auditor qualifications, audit scope, reliance on internal auditors, and the limited review of audit findings.

The Panel also is concerned that the principal focus of the audits was on compliance and verifying that required management systems were in place to satisfy legal requirements. It does not appear, however, that BP used the audits to ensure that the management systems were delivering the desired safety performance or to assess a site’s performance against industry best practices.

BP is in the process of changing how it conducts audits of safety and operations management systems, including process safety audits.

Timely correction of identified process safety deficiencies. BP has sometimes failed to address promptly and track to completion process safety deficiencies identified during hazard assessments, audits, inspections, and incident investigations.

The Panel’s review, for example, found repeat audit findings at BP’s US refineries, suggesting that true root causes were not being identified and corrected. This problem was especially apparent with overdue mechanical integrity inspection and testing.

Although BP regularly conducts various assessments, reviews, and audits within the company, the follow-through after these reviews has fallen short repeatedly. This failure to follow through compromises the effectiveness of even the best audit program or incident investigation.

In addition, BP does not take full advantage of opportunities to improve process operations at its U.S. refineries and its process safety management systems.

Corporate oversight. BP’s executive management either did not receive refinery-specific information that suggested process safety deficiencies at some of the US refineries or did not effectively respond to the information that it did receive.

BP’s process safety management system was not effective in evaluating whether the steps that BP took were actually improving the company’s process safety performance.

The Panel found that neither BP’s executive management nor its refining line management has ensured the implementation of an integrated, comprehensive, and effective process safety management system.

A substantial gulf appears to have existed, however, between the actual performance of BP’s process safety management systems and the company’s perception of that performance. Although BP’s executive and refining line management was responsible for ensuring the implementation of an integrated, comprehensive, and effective process safety management system, BP’s Board has not ensured, as a best practice, that management did so.

Copyright The Financial Times Limited 2007

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