Opportunity from Failure – Incident Reporting in the DP Industry

Presentation Outline

I. The DP Assurance Effort toward Increased Reliability & Safety A. Brief overview of DP Assurance

1. Prevention

2. Execution

3. Resolution

B. A cyclical process

II. The Profit of Safety A. The evolution of company safety programs

B. The positive effect of the current safety environment

C. Internal safety focus – Safety as a marketing tool

D. ISM and the marine industry philosophy – a similar approach

III. (R)Evolution of the DP Industry A. Evolution + Revolution

B. Growth of technology and diminishing experience

IV. Aviation Industry Parallels A. Brief history of aviation industry efforts at incident reporting

B. Effects of industry-wide efforts

C. The human factor symptom

V. Conclusions

VI. Focus Questions – Why, What, How, and to Whom?

Abstract

Available industry-wide DP incident tracking programs are not used to their full potential, if they are used at all. While programs, policies, and procedures continue to evolve that attempt to prevent any loss of position, little has been done to openly address the lessons stemming from incidents that do occur. Companies – believing they are protecting commercial interests by avoiding unwanted scrutiny – neglect to report incidents or near hits, or fail to provide a transparent method of evaluating them by public means. Consequently, many potential risks may be known to specific vessel operating companies and DP equipment vendors while a majority of the industry remains unaware of possible operating dangers or learning, training, and improvement opportunities.

The offshore industry’s experience with serious dynamic positioning incidents has been minimal due in no small part to continuing efforts at mitigating risk within individual companies’ DP related operations. However, the industry owes significant credit to the skill of DPOs and Engineers and straightforward luck and circumstance in avoiding a greater number of personnel, environmental, and property casualties. Whether they are considered to be mechanical, software, procedural, or human in origin, failures are unavoidable. What can be controlled is how the industry can improve based on the lessons learned from witnessed failures. Whether the necessary changes are procedural, regulatory, or mechanical in nature, there are a number of corrections that can be performed on an industry wide scale to insure that potential failures are eliminated or their effects mitigated. Invaluable opportunities at lessons learned are lost when failures are witnessed but companies forgo available public reporting methods choosing instead to publicize lessons learned only within their own fleets.

Efforts at zero loss of position incidents and the programs implemented to attain such goals are commendable and well worth continued support. However, the industry has collectively done a disservice to its personnel by failing to properly and publically incorporate potential lessons learned from failures and incidents that are witnessed. While DP incidents resulting in loss of life or serious property and/or environmental damage are relatively infrequent the much more commonplace minor loss of position incidents, bent bulwarks, and the innocuously labelled “paint transfers” must serve as reminders that many types of failures can and will occur and that the severity of such incidents may only be a matter of time and place of occurrence.

The Key Aspects of DP Assurance

From a high level perspective, DP Assurance consists of three distinct phases. The first phase – “Prevention” – incorporates a comprehensive engineering analysis of an asset beginning at concept and design through delivery. The goal is to provide a safe, reliable vessel or platform prior to the vessel even being delivered.

Once an asset is delivered DP Assurance enters the “Execution” phase providing sound, intelligent, and realistic operating protocols, policies, and procedures. Effectively providing the essential tools which the DPOs, engineers, and other operating personnel require to operate in a safe and reliable manner. Further, a comprehensive package of services applicable to any asset throughout its intended service life, including guidance on recommended practice, sustainable fitness for purpose, evolution of industrial mission, and the progressive development of operational and management personnel.

Finally, when failures occur resulting in incidents and accidents exhaustive DP Assurance regimens provide “Resolution” - Availability of extensive industry expertise to generate a swift and

exemplary reaction to failures and incidents regardless of cause – mechanical, procedural, or human – to create an environment in which an asset and its operating and management personnel progress in development through lessons learned.

What is most critical is that DP Assurance is a cyclical, closed loop process incorporating lessons learned back into the assurance sequence. The ultimate goal of any worthwhile DP Assurance program is to create a cyclical process by which we absorb lessons learned from both successes and failures and implement them to improve the industry at large. Incident and accident reports contain critical information that is essential to improving the design and operation of current vessels and new designs to come.

The Profits of Safety

Over the last 4 decades various industry groups have highlighted the need for personnel safety both shoreside and afloat. Industry safety organizations such as OSHA (US), IOSH (UK), etc. now require programs that focus on individual worker safety. Within these organizations are subgroups focused on specific industries, including the marine industry. In the US the Marine Advisory Committee for Occupational Safety and Health (MACOSH) was organized within OSHA. The onus for development and implementation of such programs has been – and continues to be – on individual companies.

The result is the myriad of internal Health, Safety, and Environmental programs with which virtually every industry is familiar. Companies are now required to have safety programs dedicated to keeping personnel safe. These programs fly banners carrying various catch phrases and slogans but the focus is essentially the same – zero accidents. Or, more accurately, the goal is a reduction in lost time accidents and the costs associated with them.

The efforts of OSHA, IOSH and others have been successful, having resulted in demonstrably decreased worker illnesses, injuries, and death. In the US, a high level view across industries reveals that since 1970, workplace fatalities have been reduced by more than 65 percent and occupational injury and illness rates have declined by 67 percent. At the same time, U.S. employment has almost doubled. Likewise, worker deaths in America are down, on average, from about 38 worker deaths a day in 1970 to 12 a day in 2012. All told, worker injuries and illnesses are down – from 10.9 incidents per 100 workers in 1972 to 3.4 per 100 in 2011 (www.osha.gov/oshstats/commonstats.html).

Similarly, UK HSE statistics of the offshore industry note that the rate of fatalities and major injuries have been reduced from approximately 300 per 100,000 workers in 1998 to less than half that ratio in 2012.

Despite what might be inferred from these statistics and arguably the core principle of safety programs, the undeniable success of such programs has had a hand in creating a severely cynical view of incident investigations and reports. Personnel and workplace safety has had a tremendous impact on the profitability of a company. In fact, this is one of the great selling points of an effective safety program, the success or failure of which is dependent on “lost time” incidents and accidents. “Near hits/misses” is another statistic used in the world of safety, but in reality provides zero-value added data unless that data can be directly linked to a company’s “lost time” statistics which, in turn, is tied directly to profitability.

This is not to say that profitability based on safety is wrong. Businesses are designed to be profitable and should make efforts to do so safely and ethically. However, by promoting the

profitability of safety in a competitive environment safety becomes not just a commercial interest but also a commercial weapon for use in gaining market leverage.

At face value, the effect on incident/accident reporting is then obviously negative. Understandably, a company would not consciously choose to expose any potential faults or weaknesses to clients and competing organizations. It will require no less than a paradigm shift in the industry to view incident reporting as affecting positive changes in safety as well as profits.

If changing an entire industry’s perspective is potentially the most difficult part of this issue, gathering the data may very well be the easiest part. This is due in no small part to the requirements of ISM – itself born of disaster. Part of every company’s SMS is the requirement that, “non-conformities, accidents and hazardous situations are reported to the Company, investigated and analysed with the objective of improving safety and pollution prevention.” Further, “The Company should establish procedures for the implementation of corrective action.”

The protocols of ISM therefore recognize the critical importance of reporting and investigating incidents and the hazards that may lead to them. However, much like the safety programs discussed above, it provides no requirement for external reporting nor does it indicate any obligation or responsibility to the industry at large.

(R)Evolution of the DP Industry

The DP sector and consequently the entire offshore industry is at a pivotal juncture in their mutual growth and development. Comparable to virtually any industry, the offshore industry is experiencing a natural progression with regard to the continuing evolution of technology, guidance and regulation, and so forth. With exponentially increasing global energy demands and close public scrutiny following multiple incidents, this evolutionary cycle is being pushed along a shortened timeline. The number of DP capable drilling units more than doubled between 2005 and 2012. Similarly the quantity of DP systems sold by a major vendor increased fourfold in the same time. The number of certified DP operators in the industry as of 2012 was estimated to be five times what it was in 2005 and it is not nearly enough to fill the available vacancies.

Taken altogether, the industry is progressing at an incredible pace. As technology advances and both personnel and industry expertise lag incident reporting, investigation, and resolution become critical tools in any effort to keep up with that pace. This is certainly true of operating personnel, approximately 70 percent of whom has less than three years of experience as DP operators, yet are expected to operate highly technical equipment with precision and acumen.

This is likewise applicable to shoreside support and management roles. The leading edge of the DP sector as in any technically driven industry can only function to the level of wisdom, understanding, and expertise demonstrated by those responsible for the support of operations, management of personnel, and ultimately the development and implementation of its policies, procedures, and regulations.

In this regard, the industry is at a critical point where sharing knowledge and experience can assist in influencing policy and regulation. Industry groups providing guidance and sway to regulatory agencies meet regularly to discuss evolving industry trends, new technologies, personnel needs, etc.

Aviation Industry Parallels

An industry that has undoubtedly benefited from a public incident reporting scheme has been the aviation industry. While obviously not as dramatic, the modern offshore marine industry parallels the aviation industry from half a century ago with its exponential growth and unprecedented development of new technologies.

The first call for public reporting, trend analysis, etc. came in 1958 when United Airlines President William Patterson stated, "you take your statistics - and your records - and your exposures - and you act before the happening!“ The aviation industry began to voluntarily offer incident reports – limited – and relevant data for industry scrutiny. Soon thereafter, the industry witnessed a drastic drop in incidents. After it was discovered that a 1974 casualty could have been prevented if a similar incident experienced by a competing company had been reported, the Aviation Safety Reporting System (ASRS) was implemented, making reporting of incidents mandatory (though confidential) in 1976. This was accompanied by another noticeable decline in incidents.

As with any significant paradigm shift, the realization of ASRS came about only with the cooperation of all concerned parties in the aviation industry. Airlines, equipment manufacturers and vendors, regulatory agencies, and investigative bodies, among others all had to put many company commercial interests aside in the name of industry safety. Today’s aviation industry is thriving commercially at least partially as a result of its recognition as an extremely safe means of transporting people and goods.

Conclusion – Opportunity from Failure, a Reason to Adjust Focus

The growth of energy demand and the evolution of technology is quickly outpacing the offshore industry’s ability to capitalize on the full potential of either. The more aware the industry is of the issues that it faces, the more intelligently it can effectively manage those issues. Effective management means not only mitigating failure but also leveraging success. But with the potentially high risks due to exposure it would appear counterintuitive that an owner, operator, vendor, or charterer would purposely choose to disclose faults or weaknesses to a wider audience. However, proactive efforts to track incidents and apply the lessons learned from them offer significant returns in many areas of the industry.

As an example, efficiency is of increasing concern in the industry of late. Environmental concerns stemming from emissions, fuel consumption, and maintenance concerns are driving efforts toward more economical operating modes and equipment. To that end studies and research dedicated to cost effective operating modes and technology are in progress by organizations such as the Marine Technology Society (MTS) who recently completed initial research into closed bus operations for MODUs and other DP capable assets. Such research can only progress and ultimately succeed with feedback from the industry on concept and operational failures and successes.

From an another perspective, potential hazards come in many forms beyond the tangible losses resulting from catastrophic failures. As noted earlier, information itself can be dangerous if not managed properly. In the current age of social media it is a safe assumption that every incident will receive wider publicity than may be comfortable for an organization. How a company and its leadership react to this publicity can affect its reputation and profitability for years afterward. A swift and exemplary reaction to failures and incidents regardless of cause and a demonstrated history of a wider concern beyond profit margins may mean the difference between a company’s ability to withstand a setback versus setting the scene for its demise.

There are many organizations within the industry with commercial interests in noting failures. Equipment manufacturers, shipbuilders, regulatory agencies, Class Societies, charterers, and owners and operators all have significant interests in potential hazards or benefits that come along with developing technologies. A safe, open forum for incident reporting provides a platform for open communications between all concerned parties in the industry. Each party has a strong interest in the more open discourse in the industry. Vendors, equipment manufacturers, owners, operators, and charterers all have a significant investment in the reliable operation of their specific ventures. By taking a proactive approach and reporting opportunities for improvement as well as successes the wide spectrum of stakeholders will realize a greater obligation to the industry. Through the open exchange of problems and solutions more significant advancements may be realized sooner in DP related technology with quicker resolutions to issues.

Taken altogether, the various issues facing the offshore industry in general and the DP sector specifically can be summed up in one issue: education and awareness. An increasing percentage of personnel both shoreside and afloat are lacking the expertise to efficiently manage DP operations and effectively cope with incidents that do occur, both of which lead to increased downtime and excessive costs.

The more aware all concerned parties within the industry become, the more effectively it can work with industry colleagues and regulators all of whom share the same concerns themselves. Similarly, the more aware regulators are the more wisely they can develop and apply policy which governs the entire industry. Consequently, more frank discussion about realistic policies and requirements may take place between regulators and those that are most affected. Most importantly, these discussions and results of improved awareness can directly increase the safety, reliability, and efficiency of operations at an industry level rather than just at the individual company level.