Who's responsible for contractors' safety?

The notion of harmonisation around health and safety legislation is largely a distraction when it comes to contractor management in oil and gas operations, said Greg Smith, legal practice director at STE Safety & Legal. He will be presenting a keynote on ‘Rethinking contractor safety management’ at the AOG conference, which is being held in Perth from 11-13 March.

Despite the mountains of paperwork deployed in the name of safety, Smith said some organisations still struggle to understand what they are accountable for in a contractor environment. He believes the complexity in the legislation could be part of the reason for this, as offshore oil and gas is not even covered under the WHS legislation.

Most operators (or principals) of oil and gas facilities use commercial contractors and it is particularly common practice in offshore operations. “This can transfer commercial risk to the contractor company,” said Smith. “However, when it comes to health and safety risk, it’s a different story altogether.

“Principals (particularly large organisations) find it very difficult to simply let contractors do their job under their own safety systems and they continue to interfere in the way that contractors manage safety. By doing this, they often increase their own legal risk and often undermine effective safety as well, most often because it creates confusion about what processes apply and who is accountable for what,” said Smith.

It is important that each party in a contractor management situation has clearly identified and understands all the risks and knows which person is responsible for each risk and how each risk is managed. “Principals need to trust the contractors but hold them accountable for their actions,” said Smith.

This can’t be achieved by simply hiding behind mountains of paperwork, said Smith. He said while most documented contractor safety management systems include what is required to manage the safety in a contracting environment, they are often designed with no real view to manage the risk but rather to simply try to demonstrate legal compliance.

The documentation creates an ‘illusion of safety’ as it is often far too complex for the contractor and their worker to understand and, as a result, it’s not even used, said Smith. In his experience, he said the majority of contract workers believe the documentation is just designed to ‘cover management’s backside’ and have no appreciation for its content.

“Historically, when a worker is killed or injured as a result of not following procedures, almost inevitably what emerges is that the procedure hasn’t been followed by the majority of workers over a significant period of time. There is often a systemic non-compliance with the processes,” said Smith.

“Particularly in contractor management, this is not a conversation about the individual worker,” said Smith. “It is a failure of management to understand that their processes are not being complied with.

“I think that this is highlighted by comments in the New Zealand Pike River Royal Commission which highlighted that the board appeared to receive no evidence proving the effectiveness of their crucial systems.”

While most organisations can tell you what the lost time injury rate was, how many safety walkarounds have been conducted and how much training has been completed, Smith said there is usually no data or evidence to say that critical risks were actually being controlled.

“Injury rates, in my view, offer absolutely no insight whatsoever into whether the safety management systems are working, and yet in a contract environment they are one of the key tools used to select contractors.”

But all too often if a contractor does have an incident, the principal wants to interfere and tell them how to do the job. Liability for safety incidents can very quickly turn to the question of who has control and expertise. Therefore, Smith said: “The more the principal interferes in the way a contractor performs his work, the easier it is to prove they had relevant control.”

Smith said principals are not holding their contractors to account, and as soon as you have a question on accountability, problems can quickly slip through the gap and that critical risk may not be effectively managed.

Awarded the Educational Award for 2014 by the World Safety Organisation for his book titled Contractor Safety Management, Smith will be talking more about this issue during the ‘Managing contractor health and safety’ program at the AOG conference. Fundamentally, he will be trying to help people understand the balance between managing legal and safety risk in a contracting environment. It is an intellectual exercise, he said, because making decisions to manage one can potentially create exposures in the other