Capital Preservation, Businesses’ Life Blood

If They Were Called ‘Instrumented Capital Preservation Systems’ Instead of Safety Instrumented Systems, Every CEO Would Insist the Company Invest in Them

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By Dave Harrold

“Those who ignore history tend to repeat it,” says the old adage.  No doubt that’s true, yet we continue to ignore the message.

For more than four decades the chemical industry has talked about process safety management (PSM), created sophisticated ways and means to identify and analyze risks, developed quantified probability statistics, implemented multiple layers of protective procedures and systems, and yet serious incidents continue to kill and injure people.

Why?

Ignoring the past

During the 1970s and 1980s a series of chemical incidents occurred that are so legendary that they are often referenced by the nearby city: Flixborough (1974), Seveso (1976), Mexico City  and Bhopal (1984). These were catastrophic incidents that awakened the world to chemical industry risks and each has been summarized in Lees’ Loss Prevention in the Process Industry (Sam Mannan, ed., © 2005, Elsevier.)

Despite some of these incidents occurring as many as three decades ago, the errors and root causes that led to these accidents still exist today. Process safety guru Trevor Kletz discusses this problem in his book, Lessons from Disaster: How Organizations Have No Memory and Accidents Recur, (© 1993, Institution of Chemical Engineers, Rugby, U.K.). Kletz discusses with significant detail numerous incidents that were examined, documented, and the results openly shared, only to have a nearly duplicate incident occur at a different facility just a few years later. Kletz’s findings reveal that organizations tend to have poor memories resulting from such factors as insufficient failure investigation, inadequate communication and distribution of investigation findings, lack of information retention and little training concerning previous plant, company and industry near misses and incidents.

A recent example of how those who ignore history tend to repeat it occurred on March 23, 2005, at BP’s Texas City facility, where 15 people died and more than 170 were seriously injured.

Since that 2005 explosion, numerous committees have examined the Texas City incident, and their findings have been made public. Among these are the Mogford Report, the Stanley Report and BP’s Management Accountability Report.

There is also The Baker Panel Report, a 347-page document prepared by an 11-member panel chaired by former secretary of state James A. Baker III. (For a copy of the report, go to www.csb.gov/completed_investigations/docs/Baker_panel_report.pdf.)

Issued in January 2007, the Baker Panel Report was prepared as a result of urgings from the U.S. Chemical Safety and Hazard Investigation Board (CSB, www.chemsafety.gov/) for BP to commission an independent study of all of its U.S. refineries.

In the report, the panel said that BP failed to provide "effective" leadership to make the safety of its industrial equipment "a core value" at its five U.S. refineries. In other words, BP did not foster and embrace a robust safety culture.

In March 2007, CSB issued its own 341-page report about the Texas City incident. (See www.chemsafety.gov/index.cfm?folder=completed_investigations&page=info&INV_ID=52 for a copy.)
Dr. Daniel Horowitz, CSB Director of Congressional, Public and Board Affairs, summed up the findings of both reports when he said, "It is a very significant finding that BP does not effectively investigate incidents throughout the corporation. If you're not learning from near misses, you're not in a position to prevent major disasters like the one in Texas City."

So there it is once again, that age old prophecy, “Those who ignore history tend to repeat it,” – but it really doesn’t need to be that way.

It begins at the top

The Baker Report included ten recommendations, the first being, “The Board of Directors of BP p.l.c, BP’s executive management (including its Group Chief Executive), and other member’s of BP’s corporate management must provide effective leadership on and establish appropriate goals for process safety. Those individuals must demonstrate their commitment to process safety by articulating a clear message on the importance of process safety and matching that message both with the policies they adopt and the actions they take.”

The CSB report wholeheartedly endorsed the Baker Report’s recommendations.

The message to BP and the rest of the chemical industry was clear: Create a top-to- bottom safety culture that talks the talk and walks the walk. Learn from the past and apply it to the present. Do what you are morally and legally obligated to do in order to provide a safe working environment for your employees and the surrounding community. Establish a safety culture that helps preserve shareholder value. Stop making excuses.

Stop the eye rolling

Stand before an audience of senior executives and/or shareholders, use the word “safety” in your opening remarks and watch the eyes begin to roll as everyone begins looking for the nearest exit.

Now imagine that same audience’s reaction if you substituted the word “capital preservation” for “safety.” Imagine just how attentive the audience, especially the shareholders, would become if you explained to them that a proven-in-use, industry- and regulator-accepted, fully documented guideline is available that significantly helps to preserve capital investments.

Of course they’ll listen. These are people who pay very close attention to the stock market, commodity prices and world events that can affect both. These are people who are all about reducing risk and preserving capital. You will have their attention.

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