28 October 2013

Offshore Health and Safety –

The Practical and Legal Issues

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Programme

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17.00–17.15 Welcome and introduction Martin Peter Næsby, Oil Gas

Denmark, and Bo Sandroos,

Sandroos Advokatfirma

17.15–18.00 Offshore Health & Safety –

Why, What and How

Bo Sandroos, Sandroos

Advokatfirma

18.00-18.15 Break

-

18.15–19.00

Offshore Health & Safety –

Beyond Legal Requirements

Finn P. Brodersen, DONG E&P,

chairman of Oil Gas Denmark’s

HSE Committee

19.00- Workshop close, discussion and

networking

All

Bo Sandroos, attorney

28 October 2013

Offshore Health and Safety – Why, What and How

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Overview of presentation

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Why

The importance of health and

safety

What

Overview of rules and

regulations

How

Implementation measures

The case of compliance

Costs of non-compliance

The history

The legal hierarchy

Basic provisions

Examples: HSC, PPE

EU developments

Guidelines from the DEA

The obligations of various groups

Internal organisation in the company

Summing up

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Offshore Health and Safety

1. Why

The case of compliance

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• Safeguarding the health and safety of staff and all – Ethical argument

• License to operate – Part of ”Scorecard” of host governments

– Part of measure of operators when tendering/contracting

• Operational and financial benefits – Talent attraction

– Optimised processes

– Operational integrity

Costs of non-compliance – an example

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The contract:

Team: 4-man contractor team sent to work offshore

Job: 14 days work @ 12 hour shifts

Worker’s hourly rate: DKK 300 + overhead

Total value of the job = DKK 504.000

Lost-time accident. 1 person sent onshore, incapable to work. 3 days before replacement arrives

Costs:

Heli-transport: DKK 25,000

Loss of productivity for 3 days DKK 27,000 (1 person, 25%)

Costs of ”ramp-up” of productivity DKK 27,000

Total loss DKK 79,000

16% of contract value Not including sick pay, social

benefits costs etc., and other

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Offshore Health and Safety

2. What

Authority measures / tools

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Guidelines

Legislation

Control

Sanctions

The history of H&S on DKCS

• Pre-1981: health and safety legislation from onshore made applicable to the offhore area

– Working Environment Act

– Administered by Danish Working Environment Authority

– 1976 the Danish Energy Agency established

• 1981 - ”Havanlægsloven” – the Offshore Installation Act

• System basically unaltered until late 2005

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The legislative hierarchy

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Act (lov)

Order (bekendtgørelse)

• Offshore Safety Act

• Subsoil Act

• Act on the Continental Shelf

• EU Directives and Regulations

Guidelines (vejledninger)

”Hard” law

”Soft” law

The hierarchy - Offshore Safety Act

• Act No. 510 of 13 May 2013 on Safety, etc. on Offshore Installations for Exploration, Extraction and Transport of Hydrocarbons (Offshore Safety Act).

• Replaces former Offshore Installation Act (“Havanlægsloven” 1981)

• Covers both design/construction, major hazards and occupational health and safety

• Relatively detailed regulations, supported by Orders (“bekendtgørelser”)

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Overview of the OSA

• Design approval, OSA § 27 – fixed installations

• Operational permit, OSA § 28 – both fixed and mobile (rigs)

• For both fixed and mobile: Health and safety case – HSC, or SSR – ”sikkerheds- og sundhedsredegørelse”

– Updated in case of material changes to design or operating conditions

– Health and safety risks as low as reasonably practicable (ALARP)

• To be prepared by the operator or the operating company (”driftsansvarlig virksomhed”)

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What does the SSR contain, as a minimum?

Offshore Safety Act § 23 - 26

1. Detailed description of the facility and its operating conditions

2. Detailed description of the health and safety management system

3. Risk assessment of major hazards and occupational health hazards

4. Documentation that risks identified are as low as reasonably practicable (ALARP)

5. Documentation that evacuation to a safe place can be carried out effectively and in a controlled manner under critical circumstances

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The hierarchy - Orders

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Order (bekendtgørelse)

1. Registration and reporting of injuries (2013)

2. Use of products and materials (2013)

3. Portable pressured equipment (2013)

4. Construction, design and equipment – fixed install. (2013)

5. Mobile offshore facilities (2013)

6. Preparedness on offshore facilities (2012)

7. DEA’s tasks and responsibilities (2012)

8. Extension of area of application of OSA (2011)

9. EU critical infrastructure (EPCIP) (2011)

10.Offshore working time (2010)

11.Duties of producers and importers etc. (2010)

12.Eduaction of safety group members (2010)

13.Health and safety on mobile units (2010)

14.Health and safety on fixed installations (2010)

15.Offshore Safety Council (2010)

16.Operating fixed installations (2010)

17.Signs and signals (2010)

18.Articifial optic radiation (2010)

19.Health and safety management (2010) (HSC – SSR)

20.Noise (2009)

21.Biological agents (2009)

22.Educational qualifications from third countries (2008)

23.Exchange of information on educational etc. (2008)

24. Ionising radiation (2008)

25.Personal protection equipment (PPE) (2008)

26.Monitors (2008)

27.Manual handling (2008)

28.Vibrations (2008)

29.Preparedness Committee (2007)

30.Cost compensation to DEA (2007)

31.Major accidents commission (2007)

32.Delegations to the Danish Maritime Agency (2006)

33.Energy Complaints Board (2006)

Act (lov)

An example – personal protection equipment. The Act

The Offshore Safety Act

§ 53. The employer shall ensure that health and safety risks

connected with the performance of the work are identified, assessed and reduced as much as reasonably practicable and that threshold limit values established in rules laid down pursuant to this Act are complied with.

§ 55.1 The Minister for Transport and Energy can lay down more

specific rules on the performance of the work and on medical examination of the employees before and during the employment and on examinations of occupational health, occupational hygiene or

other health conditions.

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An example – personal protection equipment. The Order

Order No. 398 of 15 May 2008 as amended by Order No. 522 of 25 May 2011 on the use of personal protection equipment on offshore installations

§ 3 Health and safety risk assessment – ALARP. Refers to Order on health and safety management (2010) plan work so as to avoid

the use of PPE

§ 5 PPE shall be in accordance with Order on the safety requirements of PPE (onshore: Order No. 683 of 10 June 2013)

§ 8 Employer only allow work requiring PPE if PPE is used

§ 9 Employer ensure that PPE is used from start to end of work

§ 10 Employer ensure that PPE shall 1) provide protection, 2) does not diminish the assistance of glasses, hearing aids etc., 3) fits the user, 4) is suitable under the conditions at the workplace, and 5) are based on ergonomics and the employee’s health

§ 11 Employer provide the PPE

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EU developments

• Directive 2013/30/EU of The European Parliament and of the Council of 12 June 2013 on safety of offshore oil and gas operations and amending Directive 2004/35/EC

– Member states to transpose by 18 July 2015

• Focus on major hazards – Safety critical systems

– Well operations

– Independent verifications

• Danish regulatory authorities are undertaking a review – The Danish ”one-stop-shop” (resources and safety) may come under

pressure

– Many small to medium changes throughout the current rule set could be expected

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Offshore Health and Safety

3. How

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Guidelines (vejledninger)

Guidelines from the DEA

• Registration and reporting of industrial accidents,

Rev. 1 - September 2013

• Management systems for health and safety,

Rev. 0 - August 2013

• Responsibilities and collaboration, Rev. 0 –

August 2013

• Approvals and permits, Rev. 1 - December 2012.

• Health and safety cases - December 2012.

• Education and competences - December 2012.

• Safety educations for work offshore, Rev. 6 -

August 2012.

• Working time rules in the offshore sector, Rev. 1 –

January 2011

• Drilling - Exploration, 1988, Rev. 2003

Focus on responsibilities and collaboration – ”production and operations”

License holder

Operator and operating company

Contractor

Contractor

Operating company on

drilling rig

Contractor

Contractor

Contractor

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Where the operator is also the operating company (”driftsansvarlig virksomhed”)

Focus on responsibilities and collaboration – within the operating company

Operating company

Manager

Work leader

Platform supervisor

Work leader

Other staff

Work leader

Other staff

Work leader

Work leader

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Onshore

Offshore

Employer: OSA § 10

Planning, supervision, awareness,

ALARP, collaboration. Strict liability

”Virksomhedsleder: as the employer

+ OSA § 10.6 – ensure employer fulfills

duties. No strict liability

”Anlægschef”: overall responsibility for health and safety on

the facility. OSA § 11 + 500 m. safety zone + where impact on

ships, vessels etc. working

OSA § 12: ALARP within his/her functional area.

Inform platform supervisor

Work to secure the employer’s obligations.

Collaboration.

Reporting

Summing up – the legal aspects

• Process: – Start by looking at the Offshore Safety Act

– Review the applicable Order

– Review any applicable Guidelines

– Investigate if the matter has been discussed in the Offshore Safety Council

• Prepare an ”SOP” for legal compliance in offshore health and safety – management system and HSC

– The operator

– The contractor

• Health and safety is a management and line responsibility – also the legal aspects

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Thank you

Sandroos advokatfirma Kronprinsessegade 46E, DK-1306 Copenhagen K

+ 45 40885422 sandroos@sandroos.dk

www.sandroos.dk