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DRAFT April 08, 2010

CEO-Process Safety
Presentation
This is just a template for a presentation
at e.g.Board meetings after showing the
film
Process Safety Pays
and has to be customised to the needs of
the specific company (see accompanying
booklet)

Intro: Flying

Process Safety

Reference to/lead over from the film


Flying and Process Safety both are complex man
machine interfaces
Major incidents both in (commercial) flying and Process
Safety have high consequences. However, the
probability is very low if operations are designed and
maintained according to the most up to date standards
Airlines are high reliability organisations so must ours
be in the process industry, can we say the same of our
organisation??
Focus on safe operations integrity is essential for an
airlines success... Must be the same for process
industry!
Process Safety must be among the top priority for
sustainable growth of our company as it is for airlines

Threats: Consequences of major Process


Safety incidents
(choose examples as close as possible to own business)

If Process Safety fails (such as: Seveso, Bhopal, Piper Alpha,


Toulouse, Buncefield, Texas City, ) Consequences of one
incident alone bear the potential to cause significant
problems/losses:
Multiple casualties
Environmental Damage
Legal (e.g. liability [e.g. murder prosecution of Thyssen management
in Italy, Culpable Homicide in U.K.] may be of special interest for the
target audience and therefore worked out further)
Business and reputation (leadership, brand, revenue of company or
entire industry sector)
Share price (e.g. BP/Texas City, Union Carbide/Bhopal, Exxon/Exxon
Valdez)
Management becomes distracted from other aspects of the business

The same is true for the aviation industry


Swiss Air, PanAm, Air France, .....

Threats: Consequences of medium/minor


Process Safety incidents
(choose examples as close as possible to own business)

Process incidents with no (near miss) or minor


consequences happen more frequently than major
accidents, but in general do not reach Board attention
Examples from your own company
May have the potential of major impact (examples!)
In general no KPIs are used for Process Safety

OSHA type incidents resulting mainly from general


activities in the process plant happen more frequently.
Performance in general is monitored at Board level
Such as tripping, falling, cuts, bruises from industrial
activities such as scaffolding... (examples from own
company)
Well established KPIs available and often perceived as the
measurement of state of safety of organization

Case Study
Insert here a negative case study from your own
company, use the following case study from a
company which does not exist any longer (Hoechst
AG) or any other case study which may fit (e.g. Texas
City)

Case Study: Hoechst AG (Germany) 1993 -1The incident

Expected procedure: addition of sodium hydroxide to o-nitrochlorobenzene in methanol under stirring during 8 hours o-nitroanisol
Procedure leading to the incident: stirrer was not switched on
during addition of sodium hydroxide accumulation of reactants.
When noticed, stirrer was switched on against orders from
supervisor runaway reaction overpressure release of appr.
10 to of reaction mixture

Consequences

No casualties/injuries due to functioning of pressure safety valve


Widespread contamination of residential area extensive clean-up
Extensive nation-wide media coverage (up to 250 reports/day) for
>10 weeks as every other (even minor) incident at Hoechst sites
received much attention
Long term damage to image of the whole sector

Case Study: Hoechst AG (Germany) 1993 -2Causes of the incident

Direct cause:
combination of operator errors
Root causes:
Insufficient risk assessment of the chemical reaction
Insufficient implementation of safety management system
Sub-standard technical equipment (stirrer control/interlock)
Process safety was not in focus of senior management as
visible performance seemed to be good (very few major
incidents before, low figures for occupational accidents)

Accountability of/consequences for senior management

CEO resigned completely after 1 year


According to many analysts the public discussion after this
incident contributed significantly to the end of Hoechst AG (at
this time as big as Bayer and BASF)

Case Study: Hoechst AG (Germany) 1993 -3Process Safety Cost-Benefit Estimate for the German
State of Hesse

Appr. 600 units covered by Seveso II


Competent authority requested in-depth third party process
safety assessments for all of them after the Hoechst
incidents 1993
Total costs for these assessments appr. 7 Mio EURO (to be
covered by the operators)
1991 - 1993 3 major incidents occurred in the State of
Hesse with direct damages (not including business
interruption) of appr. 120 Mio EURO

If only one of them could have been avoided


by these process safety assessments this
would be a dramatic return on investments!

Benefits: Good Process Safety is more than


avoiding major incidents
(choose examples as close as possible to own business)

Less business interruption


Average productivity x% of total capacity
y% better productivity means AA EURO higher
turnover/profit

Insurance costs

Corporate image
Less problems with authorities
Easier permitting

Easier investment
Capital market more accessible to good performers (Rating!)

Our company`s Process Safety status


Risk Management/Operations Integrity System incl. Risk
Map, KPIs
E.g. defining expectations, specifying certain practices,
procedures, tools to be used in entire corporation
If not available action item! get help from industry
associations incl. EPSC

KPIs (including benchmark with peer companies, if possible)


If not available action item! get help from industry
associations incl. EPSC

(examples of) major hazards of company


Clearly explain the potential Process Safety risks to the Board
(if they dont know how severe these are, they will never vote
resources to reduce and manage risk)

How to improve/maintain a high level of


Process Safety -1(focus on specific needs of the individual company)

Personal leadership of Board members and senior executives


Review state of Process Safety regularly in Board meetings
Review system and process ensuring consistent Process Safety
management
Set targets on KPI implementation and Process Safety incident
reduction
Request immediate personal reporting of Process Safety
incidents (above a defined level, to defined organizational
levels, similar to reporting of serious workplace accidents)
Demonstrate your commitment for Process Safety in day-to-day
decisions
Ask for Process Safety at business meetings and site visits (get
prepared by senior Process Safety leader)
Talk/write about Process Safety in town hall meetings,
intranet, image brochures,

How to improve/maintain a high level of


process safety -2(focus on Board level and on specific needs of the
individual
Initiating company)
program(s) for:
Comprehensive review of key Process Safety performance
requirements and gap analysis of current Process Safety
Management System: what are our weaknesses and strengths?
Process Safety KPIs
Resourcing/expertise
Process Safety audits
Mergers and Acquisitions (Integration of heritage sites)
Changes in production portfolio
Comprehensiveness of Management of Change (organisational,
technical)
Contract operation and outsourcing
Knowledge management and transfer
Linking bonuses with Process Safety performance

How to improve/maintain a high level of


process safety -3You may close the presentation by another case study
which gives a good example for process safety or
demonstrates the way to improve process safety
performance, e.g.

space shuttle story (courtesy Exxon) :


in short as a wrap-up, demonstrating that in process
safety the overall (major) risk (for a company) can only
be reduced by reducing many small risks which are as
such far below the level of board attendance

(see following slides, which have to be worked out


further!!)

What can we learn about managing


risks from the Columbia disaster?
disaster
Despite Improvements, risks remain part of space equation

The Numbers say this: Two


catastrophes in 113 shuttle missions
dating back to 1981 is a 98 percent
success rate.
But the space agencys own
assessments place the odds of a
tragedy at one in every 250 missions,
when the launch, orbital and landing
phases are assessed. The odds of a
loss during a shuttle launch are
judged to be lower, one in 556 flights.
These odds are for flights in 2003.
They were much worse when the
shuttle program began.

As Columbia lifted off on the first


shuttle flight in 1981, NASA
assessed the prospects of a
catastrophic loss at one in 25. After
the post-Challenger improvements,
the odds bettered to one in 78.
They have since continued to
improve...

By
MARKChronicle
CARREAU
Houston

NASA
~

SPACE SHUTTLE RISK ASSESSMENTS


1981

1986

1989

2003

1ST
SHUTTLE
FLIGHT

CHALLENGER
DISASTER

POSTCHALLENGER
IMPROVEMENTS
(32 MOS./$15B)

COLUMBIA
DISASTER
(13YRS/$?B)

CONSEQUENCE

II

III

B
1:25*

1:78*

#
# #
1:556*
#
#
1:250* = 1:xxx* =
#
#
# #
1:yyy*

This needs a more


detailed explanation
for the presenter

IV

PROBABILITY
*ODDS OF CATASTROPHIC LOSS PER MISSION

LAUNCH
ORBITAL
LANDING
phases

#
# #
#
# #
#
# # # #

# ...1,000S
# ...OF
# ...SCENARIOS

Additional Reading

Company-specific choice from sources listed e.g. on


the EPSC website (see booklet) which address senior
management