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HSE for the 21st Century - My Experience in Kazakhstan


     By HSE Solutions, Inc. OSHA, MSHA, Environmental and Mine Safety Expert Witness

PhoneCall Ronald G. Hallmark, Director, HSE Solutions, Inc. at (281) 789-7186


This article outlines my experience in transforming a former Soviet Republic oil company's HSE program from a poor performer to an industry best performer using tried and proven principles.



Introduction

This article summarizes my experiences in developing a successful HSE program within PetroKazakhstan (a Canadian owned oil company) which had very few HSE systems and programs. In this paper, I try to present as clear as possible a picture of where the organization, PetroKazakhstan, was when I arrived and what actions I took along the way to HSE success.

My Arrival:

I had never been to Kazakhstan before or to any of the Former Soviet Republics. I did research the country through the Internet and found that Kazakhstan was not the barren arctic waste-land I had envisioned but rather a beautiful and diverse country with mountains and plains (called steppe) and even a portion of the Caspian Sea, the world’s largest fresh water lake. PetroKazkhstan's HQ was located in Almaty, a beautiful city which was a blend Asian and European architecture and culture.

My first day on the job was January 4, 2004. Like all new staff I had to meet the people, understand the organization, and find a place to reside. I rented a nice apartment in a perfect location called Samal 2. This area is near the mountains and my apartment was next door to the RamStore, a mall with a grocery store which made my initial experience very pleasant. I only had only a 2 minute walk to get my necessities.

The Job:

My position, HSE-Director was a new position reporting to the President. Previously, there had been an HSE & Training Director located in the Oil Field but his role was primarily related to training. My first task was to go to the oilfields and see what was going on there and to talk to the people both in HSE and operations. PetroKazakhstan (PK) had 2 main operating groups, one called PKKR which was the oil producing side and the other called PKOP, the refinery. PK also had rail loading terminals, oil storage facilities and retail petrol stations.

My Visits:

I had decided before leaving on my field visit that I would:

Meet as many key people as possible and hopefully persuade them to tell me about HSE in their areas, the good, bad, and ugly.
Visit the oil field operation sites and take a look for myself, evaluating hazards and risk measures being taken to control them.
Review the company HSE policies and procedures
Make a summary of gaps I saw and evaluate the gaps vs. industry best HSE management systems

Our 10 point HSE plan (based upon gap analysis vs. industry leaders ) included:

Enhance Management HSE Leadership- We needed to understand how Company managers/supervisors saw their role in HSE. We then needed to develop workshops which would identify key HSE roles and responsibilities for managers and supervisors. Performance goals for HSE would be included in management's Annual Performance Appraisal.
Incorporate Risk Management & Assessment – Hazard identification training should be provided for all workers as well as Introduction to Risk Management for all managers and supervisors.
Improve HSE Training – HSE training plans were not developed for each site based upon risk. New training plans for workers based upon risk needed to be developed as well training for supervisors on how to evaluate their workers in HSE performance.
Develop Contractor HSE Systems – There were no Contractor HSE Management systems. Contractor HSE Programs were identified as a critical need. A suggestion was made to hire an experienced HSE Contractor Specialist to get the program started.
Develop Safety in Design – PK had relied upon EPC contractors to ensure safety in design in the past. A “safety in design plan” would require uniform safety design procedures for all future EPC contracts. A key requirement would be a mandated Safety in Design Plan.
Update Operations & Maintenance Plans– There were many gaps in operator training as well as a lack of Standard Operating Procedures (SOPs) in many key job tasks. A contractor to develop the operator training and SOPs was proposed. Maintenance and integrity procedures needed to be reviewed and updated. A proposal for a computerized integrity maintenance system was suggested.
New Information & Documentation System – Several HSE reports being generated within PK but not under uniform standards and not combined for review by senior management. A centralized and uniform HSE reporting system and database was proposed.
Enhance Crisis & Emergency Plans- Generally the Emergency Response plans were very good and complied with Kazakh law. However, PK lacked a corporate crisis management plan. We proposed that all local site emergency response plans be reviewed and updated and the workers be trained according to these plans. Plans should also be translated into both languages used in the field, i.e., English and Russian. Hiring an experienced emergency response consultant to develop a corporate Crisis Management Plan was seen as a logical way forward.
Revamp Incident Investigation & Prevention – Since there were no uniform accident investigation procedures or accident reporting forms, we proposed that new procedures and forms for incident investigations be developed. Training would be provided to all safety/environmental engineers and supervisors on root cause analysis and the principles of accident investigation.
HSE System Assessment & Improvement – Plans were to be developed for HSE system audits which would review these 10 points on an annual basis, reporting the results to senior management.

What did we do first?

When faced with 25-30 HSE system gaps, what would you do first? I have always fallen back on my basic core belief that you prioritize based upon risk. That is what we did. For example, the refinery had no PPE (personal protective equipment) requirements so we drafted a PPE regulation and started the procurement of PPE. At the same time, we secured a training company to come in for PPE training. The accident reporting and investigation system was not a reliable indicator of accidents occurring in the field. Very few contractor accidents were reported and few supervisors knew how to complete an accident investigation form. The typical cause of an accident was “negligence”. The typical corrective action was “send the injured to the clinic”. The same accidents were repeating over and over. We immediately revised the accident procedure and forms and then implemented a training program for incident investigation. A fatal accident occurred in February, 2004, which steered me to review and update the Hot Work Permit system and to start implementing Contractor HSE Management. Until then, contractors were on their own as to how to conduct their work. The fatal accident changed all that. We started by issuing rules from senior management that all contractor activities would be overseen by a local site supervisor. We also changed the Permit system to require that local site supervisors sign and audit the work. In the meanwhile, the Permit system was revised and training was provided.

On a broader scale, I knew the company needed to understand its risks and how to manage them. I contracted a respected risk management firm to conduct a QRA (quantitative risk assessment) and to update our Emergency Response System. The QRA would identify our major process and HSE risks and provide recommendations to reduce these risks. Our Emergency Response System was basically limited to what the Kazakhstan government required. We needed a corporate crisis management plan which would oversee and direct actions in time of major incident.

These necessary measures were fully endorsed by PK senior management and they provided their full support in ensuring that the 10 points to HSE success were put into place.

Summary & Results

By the end of the first year, every phase of PetroKazakhstan's HSE performance had improved significantly. The 10 elements of the PK HSE Safety Management System were in place with improved results in HSE, morale and productivity. The keys to PK's HSE success were:

- Identification of HSE gaps vs. Best Industry Practice
Development of a “Fit for purpose” HSE Management System
Senior Management involvement and support
Measurement of HSE gaps, evaluation of the gaps with corrective actions taken
Celebrate HSE success often


Note: I turned over my HSE Director role to my deputy HSE Director (a local Kazakh) after the 1 year assignment ended in December 2004. I left feeling confident that PK would become an industry leader in HSE. In August, 2005, the China National Petroleum Corporation acquired PetroKazakhstan.

The author, Ronald G. Hallmark heads an HSE Consulting Firm, HSE Solutions, Inc. located in Banner Elk, NC USA.

ABOUT THE AUTHOR: Ronald G. Hallmark, Director, HSE Solutions, Inc.
The author has over 35 years of HSE Management experience on 4 continents. He has developed and implemented HSE programs which turned poorly performing HSE companies into top quartile performers. The author presently owns and directs an HSE Consulting Firm, HSE Solutions, Inc. which specializes in HSE Training, HSE program development, and testimony as an expert witness in safety litigation cases.

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While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.
For specific technical or legal advice on the information provided and related topics, please contact the author.

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