How to Regulation-Proof Pipeline Contractor Safety Programs

January 2017, Vol. 244, No. 1

Josh Arceneaux and Josie Speer, Consultants, North Highland

The midstream industry operates in an extremely opportunistic and entrepreneurial environment with assets that change ownership, consolidate, expand and form partnerships or joint ventures with regularity.

This constant change applies to construction of new assets, expansion of existing assets, and operations and maintenance of current assets. The vast pool of contractors servicing the midstream industry, which spans from large international EPCs to small-town contractors that specialize in a specific service offering or a limited geographic footprint, have become even more vital to the industry’s success.

These contractors play a critical role in any operator’s operational performance record and just as importantly, the operator’s safety performance record.

This article focuses on contractor safety management, particularly:

  • How to create a shared safety culture to provide a sustainable, resilient and competent workforce
  • Methods for bridging the gap between corporate safety philosophy and field safety practices
  • Identifying successful strategies to develop, build and maintain high-value relationships with pipeline contractors
  • How to integrate technology and information in ways that enable smarter, faster and safer decision-making, while significantly improving contractor safety performance

Independent of Regulations

Organizational culture equates to the aggregated behaviors, beliefs and norms that influence decisions and outcomes. While regulations do, in fact, drive actions from industry and influence behaviors, they should not define an organization’s culture. Regulations may require inline inspections at certain time-based intervals; however, this should be considered the minimum to establish a safe operating midstream system, according to an outside party that must cover the entire industry.

Each operator should establish a safety culture that enables the company to objectively determine its adequacy in meeting regulatory and other safety standards, in a manner in which needed adjustments can be made. In doing so, the idea that regulations do not equate to safety culture has been promoted. Instead, a culture in which doing the right and safe thing drives employee actions.

Accomplishing this internally represents a challenge that only becomes more complex when you include contractors. To help address this challenge and to assist with bringing operators and contractors into alignment with a healthy safety culture, there exists key principles any contractor safety management program should incorporate.  These include:

  • Creating an environment that promotes transparency.
  • Openly sharing lessons learned and best practices across employee and contractor teams.
  • Establishing clear roles and responsibilities.
  • Defining and consistently communicating meaningful safety goals and expectations.
  • Continually assessing risks.
  • Reinforcing desired behaviors with positive or negative consequences.
  • Discouraging blaming and shaming.

These principles should come from leadership – most effectively from the executive level down. Leaders must rally around safety as a top priority, regardless of operator or contractor affiliation. Therefore, the principles executives establish must also flow into contractor safety management programs as a defined requirement.

Culture, Not Regulations

It is critical to understand and articulate desired safety outcomes at the organization, job and individual employee levels. This extends directly to the field personnel and must include contractors.

Effective safety programs help employees and contractors understand expectations within the workplace or job site, help them understand how to respond appropriately and enable them to serve as better brand stewards.

To accomplish this, the concept of a shared environment based on the idea that one cannot be successful without the other provides a foundation for merging corporate philosophy and field practices for the operator and contractor personnel.

A critical concept for establishing the shared environment and bridging the gap between corporate safety philosophy and field practices of operator and contractor personnel comes from using the mental model for changing behaviors (Figure 1).

contractor1

Many organizations and regulations stop short at the ACT stage. This leaves the most critical aspects of creating safe behaviors (“believe” and “adapt”) to the overall safety culture established by the operator and contractors within a shared environment.

A strong shared environment will create common habits and a strong safety culture between operators and contractors, whereas a weak shared environment will, at best, rely upon regulatory interpretation by each party to set individual safety cultures. To make the transition to being adaptable through good habits, follow a planned progression defined by a roadmap that all stakeholders agree to execute.

It is critical that before exercising this roadmap you fully understand where you currently are.

contractor2

When navigating this roadmap and establishing initiatives to implement and execute the shared environment between corporate, the field, and the contractors, the following concepts can help ensure success:

  • Clearly communicate and provide tactical support for employees to efficiently change behaviors.
  • Create a mental model that goes through the phases of behavioral change – discover, understand, learn, act, believe and adapt.
  • Create awareness and understanding through facts, good communication and clear vision.
  • Provide knowledge through facts, training, role clarity and responsibilities (meet the needs of your audience).
  • Assist adaptation and sustainment through motivation (rewards and incentives), continuous improvement, and role and responsibility reinforcement.

The end goal then becomes the creation of a holistic safety program that promotes a shared safety culture adaptable to new or changing business needs and regulations in a unified manner.

This adaptability originates from leadership instilling good habits across the operator and contractor workforce. The shared environment then provides the foundation for an operator to work collaboratively with contractors to evolve, not just from regulatory changes, but also from lessons learned and best practices that previously may have remained isolated to the operator or individual contractors.

Beyond Regulations

The contractor safety management program must enable the operator and contractor to work in a manner that fulfills the needs of both while fostering a true partnership and maintaining the integrity of the safety culture established by the shared environment.

Only in this context may operators and their contractors make the transition from meeting the minimum imposed by regulations to establishing a shared safety culture.

High-value relationships typically have a foundation in shared needs, positive experiences and a strong partnership mentality. Shared needs arise from common business objectives, such as an operator needing a critical stretch of pipe repaired to restart operations. In this case, the operator needs to resume operations, and the contractor needs to continuously earn the right to provide the repair and maintenance services.

Positive experiences arise from a workforce that feels empowered to make emotional decisions based on rational information. The following figure provides a depiction of the intellectual and emotional components of the contractor experience.

Features of a positive contractors experience include effective two-way communications, confidence in preventative measures, meaningful interactions, shared purpose and relationships founded on mutual trust.

A strong partnership mentality emanates from a culture engaged at all levels, internally and externally, to the contractors. Figure 3 is an example of an EPC-to-operator engagement, reinforcing that leaders must commit to safety as a top priority, with the belief that contractors represent an extension of their organization.

 

contractor3

Actionable Insights  

Technology provides a significant enabler to achieving a shared environment with a common culture between operators and their contractors. Traditionally, technology has increased the ability to access and share information throughout an organization.

For many valid reasons, operators have typically kept much of their corporate operational and safety information within their own technology, accessible primarily to internal employees.

Moving forward with the push to consider contractors as extensions of the operator’s workforce, this barrier needs to come down so that sufficient and reliable information may flow freely between operators and contractors. The shared environment allows the operator in corporate offices and in the field with the contractors to make safe and critical decisions.

To accomplish this IT system, operators and contractors must be able to convert data into actionable insights that enable tough decisions to be made with rational information. This creates better, faster and safer decisions that significantly improve contractor safety performance, regardless of the regulatory environment.

Figure 4 provides an example of the types of information needed for generating actionable insights for the operators and contractors.

contractor4

For this to work, shared information must become a key aspect of the culture established in the shared environment between operators and contractors. As the midstream industry evolves, it will no longer be sufficient to exchange information limited to regulatory requirements.

The complexity of midstream systems continues to increase as the industry evolves. Therefore, the ability to make good, safe decisions that transcend regulations requires a technology ecosystem readily accessible to operators and contractors that deliver actionable insights.

Conclusion

Competition and pressures from environmental organizations, communities and industry bodies will ultimately require better and safer operations that include operators and contractors as part of the same workforce. This will require contractor-management programs to have significant input into the establishment of a shared environment that promotes a common culture between operators and contractors.

To regulation-proof this environment, operators and contractors will need to establish and maintain cultures that go above and beyond regulations and set precedents that adaptability and good habits for safety of operations are paramount.

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