A company’s safety performance and avoidance of catastrophic events is a direct result of the organization’s corporate culture, according to Carolyn Merritt, Former Chairman of the US Chemical Safety Board (CSB).
Speaking at the National Petrochemical & Refiners Association Q&A and Technology Forum, Oct. 10, in Austin, Merritt discussed corporate safety cultures, and their relation to catastrophic events, including the BP Texas City explosion (OGJ, Jan. 23, 2006, p. 51), the space shuttle Columbia disaster, and the Bhopal incident.
According to Merritt, a company’s culture is really reflected in the bonus and promotion structure.
“If your bonus and promotion structure is based only on cutting costs and maintaining cost levels, then there’s a problem. If it’s only [based] on production and not worrying about quality, it’s a problem,” she said. “There are some long-term, short-term messages. You know that there are times that you have to operate under short term. When that short-term operating process becomes your long-term process, that’s when you have a problem.”
Layers of protection
Merritt discussed safety in the context of the “layers of protection” model. Layers of protection between employees and potential risk or harm will decrease the risk of an accident.
“The problem is people are very good at bypassing, or putting holes in those layers of protection. If they put enough [holes] in there, you’re going to have a hit somewhere along the line,” she said. “But there is another potential removal of a layer of protection that has a much greater risk than what the individual can do. And that is a corporate culture.”
Downsizing, combining of departments, and budget cuts severely affect the infrastructure, training, hiring, and placement of people. This results in the removal of whole layers, not just poking holes in them.
Merritt said that companies must pay attention to the commonalities between past catastrophic events.
“It’s the culture that...allowed these accidents to happen. And that culture exists in all the catastrophic accidents,” she said.
Columbia disaster
Merritt discussed the events and investigation findings behind the space shuttle Columbia disaster.
“The first thing that the accident investigation board found was that this accident was not an anomalous random event,” she said. “That means that it was predictable and preventable.”
The organizational findings that the investigation board found, according to Merritt, were:
- Management was rewarded for budgeting and scheduling goals, and ignored employee concerns.
- There were communication silos. “If you have a culture where no bad news is really wanted, then you have a culture that sets the stage for a catastrophic event,” Merritt said.
- Inaction to warning events. There were 107 space shuttle launches before the Columbia accident in which spalling of material occurred. But nothing bad had ever happened as a result of this. The management began to believe that nothing bad could happen. When employees said this was a problem, they were disregarded because nothing bad had ever happened before, according to Merritt.
- There was reliance on safety history rather than good engineering analysis. And there was a loss of knowledge and experience. Challenger had happened almost 17 years to the day from the Columbia accident investigation. Many people who had direct learning experience with the accident had moved into other jobs, other positions, or left the organization.
- Management complacency to inherent risk.
“NASA will lose more shuttles and astronauts unless it transforms not its engineering, but its broken safety culture,” Merritt said.
Bhopal
Merritt said that the cause of the Bhopal accident was due to “a failure to respond to known risk, drastic cost cutting, warnings were not investigated or addressed, emergency safety equipment wasn’t working, poor maintenance of critical equipment, qualified supervision had been reduced, worker training was inadequate, and there was a slow response to increasing risk.”
Union Carbide had identified the potential problems at this facility and had decided to shut it down, according to Merritt. The company was convinced by the Indian government to keep it open because they needed jobs.
“That change in priority was very dangerous,” she said. “And they were actually going to shut it down because of known risks.”
BP Texas City
Merritt discussed the key findings of the CSB’s investigation of the BP Texas City explosion:
- There was a failure to assess the effect of drastic cost cutting. “Cost cutting occurred throughout all of BP’s operations, including Alaska pipeline operations, which also had problems in recent years,” she said.
- Failure to respond to internal audit warnings. There were multiple internal surveys, both from a facility and a corporate level, which BP did not respond to. How they responded to warnings was a greater emphasis on personal safety and a drive to reduce lost-time incident rates.
- Reliance on presumed past performance.
- Abnormal situations were not reported or corrected.
- There was a known unsafe design even in BP’s own policies. “They were going to replace these blowdown drums,” she said. “Blowdown drums had been replaced throughout the industry and BP, when it came time to make that decision, made it based on budgets rather than known design problems and known safety hazards.”
- Supervisors and operators were not adequately trained. There was no recognition of human factors.
- There was a lack of regulatory oversight.
- There was an overall complacency to risk.
Corporate culture
Merritt listed the common elements that the CSB has found in every investigation:
- The process safety management rules for hazard awareness identification were not fully implemented.
- Written procedures were either nonexistent or so poor that they did not reflect how to operate a process safely.
- Training was either nonexistent or so poor that it did not allow operators to understand how to operate when things were not only going well, but when things were going very badly.
- Maintenance and management of change were poor.
- Emergency preparedness is important, but what the CSB found in many of the investigations is that even for small releases, operations emergency preparedness did not exist.
- Community responders and people in the community did not know what to do in the event of a release.
- Incident investigations. Near misses are supposed to be investigated, corrected, and reported; however, many were not.
- Most facilities perform some kind of auditing. Most of the audits done were either not responded to, not corrected, or they didn’t recognize a growing risk path to a catastrophe.
“Operations cultures and corporate cultures do not want to address these problems,” Merritt said. “And therefore they choose not to do the process safety implementation that would prevent these catastrophic events from happening.”
Unintended consequences
Corporate culture is “the intentional management of the potential impact of unintended business decision consequences,” said Merritt. “Companies do not intend to kill people. You have to believe that because the alternative is unthinkable.”
The commonalities in many of the events, according to Merritt, include the failure to recognize, investigate, and correct warning events; reduction in well-trained personnel and qualified, experienced management; loss of sound engineering, safety practices, maintenance, and mechanical integrity; significant impact of cost cutting on safety, revealed by audits possibly; and escalating risk, which is reported to and denied by executive management.
Merritt said that companies must understand the difference between risk blindness and risk denial.
“Risk blindness is not knowing that a hazard exists,” she said. “Risk denial is that you know that a hazard exists, and you may even know that it’s growing, but you accept the fact that you’re going to live with that risk because you don’t think anything bad is going to happen on your watch.”
Hazard management has to begin with hazard recognition. “If there was one thing you could change, it would be tearing down barriers for people reporting catastrophic or even minor upsets without retribution,” she said.
According to Merritt, the documentation exists that could prevent many of the catastrophic events from happening-letters to management, committee reports, requests by safety officers, budget proposals, insurance inspectors comments, engineering recommendations, and vendor recommendations.
The BP accident had these unintended consequences, according to Merritt:
- Lost reputation, goodwill, and corporate image.
- Lost earnings and production.
- Diminished stock price vs. its competitors.
- Fund managers have been seeking resignations and retribution and been getting them.
- BP has spent $2 billion in litigation and there are still 1,700 cases still pending.
- The company has been before congress three times in the past year.
- There’s international scrutiny in all their operations.
- The organization has been restructured and there has been the loss of executive management.
