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Bapco Contractor Safety Management:

Bapco Case

Presented at Intersec Occupational Health & Safety Conference

Dubai, UAE

January, 2016

ByIsmail Mohamed Hussain

Superintendent Safety & Occupational Hygiene The Bahrain Petroleum Company B.S.C. (c)

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Agenda

• Bapco overview

• Definitions

• The 6-phase model for contractor management

• Bapco best practices

• Concluding Remarks

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• The Bahrain Petroleum Company (BAPCO) BSC (c) is one of the largest and the oldest oiland gas companies in the Middle East dating back to 1936.

• BAPCO refines over 265,000 barrels of crude oil per day

• About one-seventh of this crude originates from Bahrain Fields while the remainder is pumpedfrom Saudi Arabia in pipelines extending 27 kilometers over land and a further 27 kilometersunder the sea before reaching the Northwest of Bahrain

• There are a total of 48 processing units at the BAPCO Refinery with a capacity to refinevarious products including Liquefied Petroleum Gas (LPG), Naphtha, Gasoline, Kerosene,Aviation Turbine Fuel, Low Sulfur Diesel Oil, Fuel Oil, and Asphalt

• BAPCO also has a Lube Base Oil production facility, which is a joint venture between BAPCO,NOGA holding and Nestle Oil of Finland

• There are more than 170 storage tanks at different sites with a total capacity of over 14 millionbarrels

• BAPCO is the largest employer in the country employing 2900 full-time employees and morethan 1300 contractors which reach 2500 contactors during shutdowns

Bapco overview

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Bapco overview

• Named The 2007 winner of Robert W. Campbell (RWC) Award

• RWC is awarded for “Business Excellence through EHSManagement”

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definitions

• Contractor: a firm that undertakes a contract to provide materials or labour to perform a service or do a job in another firm

• Outsourcing: the process of obtaining (goods or a service) by contract from an outside supplier

• Subcontractor: a firm or a person that carries out work for a contractor as part of a larger project

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“Contractorization”: A Growing Industry Trend

SOURCE: OGP (2013)

Increase outsourcing of non-

core business activities

Contractor hours increased 5.5

times over employee hours

Contractors have higher incident rates (i.e.

recordable, lost-time & fatalities)

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Is outsourcing a “negative” thing?

• Loss of managerial control• Hidden cost• Threat to security &

confidentiality• Quality problems• Tied to the Financial Well-Being

of Another Company• Bad Publicity and Ill-Will

• Better specialization, skill &equipment

• Enables safe and sustainable operations

• Better safety performance

Economic/financial Views

-veSafety Views

+ve

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Establishing contractor safety management

20.3 million hits in 0.29

seconds!

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The 6-phase model: Bapco approach

Key issues

Evaluate contractor H&S performance to determine whether or not to keep in the “Approved Contractors’ List”

Phase 6

Close-out & review

Key issues

Inspection & acceptance of work

Receive all relevant documents or information

Confirm no new hazards are created

Phase 5

Hand-over & acceptance

Key issues

Management of contracted work i.e. meetings, training, etc.

Monitoring & inspection

Auditing

Regular performance reviews

Phase 4

Contract Implementation

Key issuesKick off meeting to define requirements & expectationsPre-commencement risk control including PTW, skills verifications, equipment

Phase 3

Pre commencement

Key issues

Define scope of work

Risk assessments of critical activities

Identify contractors capability based on type of work approved

Contract definition to include general & specific H&S requirements

Award contract

Phase 2

Contract definition & award

Key issues

Experience

H&S Program/policy documentation

Safety Statistics

Training documentation

Legal & Financial Info

History of fines

Phase 1

Contractor Pre-qualification

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Bapco Best practice

Clear

guidelines or

procedures

Incentive

scheme

Clear

Commination

contractor

integration of

processes

Contractor

individual

well-fare

Performance

monitoring

Training &

competencies

Discipline

&

exit strategy

Trade testing

Focus on

sub-

contractors

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Clear guidelines or procedures

• Contractors guide to safety

• Contractor Safety part of BAPCO Process Safety Management (PSM)

• Assign Responsibility to Company and Contractors

• Identify Hazards and Control Measures

• Establish Training and Communication Mechanism

• Maintain Safe Working Environment

• Establish Safety Committees & Employ of Safety Engineer

• Establish Trade Testing and Equipment Inspection Process

• Set Measurable Performance Goals & Objectives at all Levels

• Reward Safety Performance

• Define Safety Prequalification Criteria

• Ensure existence of effective Incident Investigation Process

• Integrate Safety in the Management Performance Reviews

• Measuring effectiveness of Programmes

• Ensure Compliance to Local Legislations

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Clear communication

Contractor A

HSE

• EHS Committee (monthly)

• Safety meetings with owner depts. (daily, weekly &

monthly)

• Kick-off meetings

• Publications (e.g. flyers, 5-minute for your safety)

• Campaign (e.g. slips, trips & falls) Clips

• Mgnt. cross-site visits (Bapco + contractors; contractor A

+ contractors B)

• Procedures & guidelines

• H&S performance shared with all stakeholders (i.e. xhq)

• Cater for different languages

Contractor B

Contract

owner

Sub

contractor

Sub

contractor

BAPCO

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Trade testing

• Every trade (e.g. welder, fabricator, safety officer, fire

watch, etc.) is tested & certified

• All equipment used by the contractor is tested &

tagged

• Trade testing & equipment testing is repeated at

regular interval

Individual

trade testing

Equipment

testing

Individual

trade testing

Equipment

testing&

Before During

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Performance monitoring

• Use both leading & lagging indicators

• Combine both Bapco & contractors performance

• Capture & analysis data on regular basis

• Benchmark each contractors’ performance against each other

• Regular audits on contractor’s H&S management systems (every three years)

• Contract close-out & review

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Contractor individual well-fare

• Often taken for granted!

• Ensure that contractor provide suitable well-fare facilities – they get audited

• Conflict management in place

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Incentive scheme

• Safety achievement is celebrated

• Positive re-enforcement of safe behaviors

• Individual & contractor incentive

Individual

contractor

Annual safety

award

presentation

Shareholder

award -

contractor

Milestone

achievement

Adhoc

outstanding

achievement

Safe project or

T&I completion

Best BBS

observer

Shareholder

award -

individual

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Discipline & exit strategy

• Establish, communicate & enforce consequences for non-compliant

contractors

• Helps eliminate time & effort required to manage bottom performers

1st offenceRetrain the whole

group for 1 day

Failure to

follow part of a

procedure

2nd offenceRetrain the whole

contractor

workforce (may

take weeks)

Same or

different

offence – no

work is done

until training is

complete

3rd offenceContractor is

suspended for

two consecutive

years

Same or

different

offence

Work with no

permit-to-work

results in

immediate &

permanent

removal

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contractor integration of processes

• Contractor management as an integral part of the complete business

processes – S&H weighs 20% of overall scores

• Examples of contractor KPI integration:

• Purchase orders issued only to pre-qualified contractors

• Work orders or permits only issued to approved contractors

• Site entry ID badges tied to contractor approval status

• Requires support of multiple stakeholders & leadership buy-in

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Focus on sub-contractors

• Often missed out, but widely used by contractors

• Sub-contractors are more likely to have incidents

• Subs pre-qualified / monitored to same level of standards as the contractors

(e.g. Safety Management system, trade testing, equipment testing,

performance mentoring, etc.)

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Training & competencies

Induction

All contractors & sub-

contractors must go

through an indication

training.

Specialized

Permit To Work,

Confined Space

Attendant, Fresh Air

Breathing, Job

Watching, etc.

In-house

Contractors are asked

to do in-house training

for their workforce e.g.

PPE, general safety

rules, etc.

Done by Bapco to ensure quality Verified by Bapco

to ensure quality

• More than 4000 contractors individuals (32,000 hours) attended training

courses in 2013

• Bapco contribution in developing contractors

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Results of H&S mgt.

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Concluding remarks

• Contractor management has been & remains a challenge for every

organization

• Contractor management systems are dynamic that requires continuous

development

• A contractor with outstanding safety performance means a client with an

outstanding safety performance and they other way around

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References

1. About Money/Bucki, J. (2013). Top 6 Outsourcing Disadvantages: Reasons That Outsourcing is Bad for Your Company.

2. [ONLINE] Available at: http://operationstech.about.com/od/outsourcing/tp/OutSrcDisadv.htm. [Accessed 09 January, 2016].

3. Health & Safety Executive. (2011). Contractor Management. [ONLINE] Available at: http://www.hse.gov.uk/pubns/priced/hsg159.pdf. [Accessed 09 January, 2016].

4. London Council. (2011). You & Your Contractor: A manual of best practice in contract & relationship management.

5. OGP (2013). Safety Performance Indicators – 2013 Data. [ONLINE] Available at: http://www.ogp.org.uk/pubs/2013s.pdf

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Thank you