»ProcessSafetyExcellence

2 3Process Safety ExcellenceProcess Safety Excellence

»Content

Introduction 3

Why should a company create safety? 5What are the root causes of safety incidents? 6How can a company achieve process safety excellence? 9The result of the implementation of process safety 13About Kienbaum and TÜV SÜD 15Contact 15

»Introduction

Processsafetyincidentsare often caused by a combination of technical problems andhumanerrorsand multiple events or failures that coincide.That’s why it is vital to regard process safety from a technical, but even more, from a people/behavioralpointofview.

The keyfactorfor a successful process safety program is based on the company’s will (resolve) for change from an audit based to a proactiveprocesssafetyexcellencedriven organization.

KienbaumManagementConsultants and TÜVSÜD created a proactiveprocesssafetycontrolsystem to support a company on its journey to process safety excellence (PSE). The system focuses on the behavioral change required to allow all employees to“live”thephilosophy of process safety and continuous improvement.

A fully fl edged and tailor-madeimplementation builds the groundwork for the realization of the behavioral change. The approach works like glue, linking the technical details to the human and management aspects. Using specifi c tools, the experts are able to assess a company’s actual safety level in order toenable the organization, by application of tailor-made procedures, to ascend the stairs to process safety excellence. The company’s DNA is complemented with enhanced proactive safety behaviours delivered through the implementation of process safety.

»Majorincidentsentailhighriskforacompany - Shareholders don't accept any shortcomings in

the area of process safety - Incidents negatively affect the public's perception

of the entire company

»Effectiveprocesssafetyprogramsreduceriskandavoidlosses

- reduce injuries from major incidents by 50 % - reduce risk of litigation costs - reduce risk of regulatory penalties from accidents - reduce risk of property damage costs

»Shareholdersfeelconfidentinexpectingcontinuousprofits.

Increase in productivity

20 %

18 %

16 %

14 %

12 %

10 %

8 %

6 %4 %

2 %

0 %Increase in Reduction

in capital budget

Reduction in project costs

Reduction in maintenance

costs

Reduction in insurance

costs

Fig. 1: The company's benefi t of process safety

Boostproductivity&lowercosts Increasedshareholdervalue

Source: Center for Chemical Process Safety (CCPS)

Reductionofrisk

Sustainedvalueofprocesssafety

4 5

»Whyshouldacompanycreatesafety?

Despite increasing compliance driven and audit based efforts to make processes safer, the majority of companies fail to give a convincing answer as to how safety excellence can be achieved in a proactive and controlled manner. It's not unheard of that a plant or platform received a safety award only to have a severe incident shortly after.

The importance of a systematic approach of safety provisions is obvious looking at some devastating accidents in the process industry in recent years. If process safety fails (see fi g. 2), the consequences of one incident bear the potential to cause signifi cant problems/losses like multiple casualties, environmental and economic damages as well as loss of human lives.

Differenthumanfailuresleadtoa"blowout"ofanoilrig,whichsanktwodayslater.» 800 million litres of oil leaked into the sea.» The company accepted the penalty of more than 4,5 billion USD.» For the coping of the oil spill 38,1 billion provision were

accounted.» 11 people died.

Chemicalaccident:USA,2010

Duetolackofmaintenance,thedamofapoolwithcausticredsludgebroke.Thesludgemingledwiththefloodingwaterofariverandfloodedthesurroundingvillages.» 7000 people were evacuated.

» The drinking water in the region was contaminated.» The vegetation has been damaged for years.

» 10 people died and 61 were injured.

Chemicalaccident:Hungary,2010

Anexplosionoccurredduetothewronghandlingofchemicals.» More than 100 tons of benzene leaked into

an adjacent river.» The drinking water for more than 4 million people had to be

turned off for more than 4 days.» More than 10000 people had to be evacuated.» 5 people died and 25 were injured.

Chemicalaccident:China,2005

Duetoamaterialfailureandalackofmaintenanceagastankexploded.

» There was a 100 m high darting fl ame.» The accident lead to a loss of production and huge restriction

on supply for more than 3 months.» The restriction on supply lead to signifi cant production problems

in the automotive industry.» 1 person died and 3 were injured.

Chemicalaccident:Germany,2012

» The drinking water in the region was contaminated.» The vegetation has been damaged for years.

» 10 people died and 61 were injured.

Duetoamaterialfailureandalackofmaintenanceagastankexploded.

» There was a 100 m high darting fl ame.» The accident lead to a loss of production and huge restriction

Importanceofprocesssafety

ChemicalAccident:USA,2010

Fig. 2: The importance of process safety

Process Safety Excellence

6 7Process Safety ExcellenceProcess Safety Excellence

»Whataretherootcausesofsafetyincidents?

In nine out of ten incidents, the root cause analysis identifi es multiple undesirable events or failures including human errors that coincide. Besides the lacking insight and the misunderstanding of the employees in the management of the real process risks, employee instability including migration and retirement can lead to the failure of the company’s safety barriers and a signifi cant degregation of process safety.

As a consequence, the need for proactive, fl exible and documented safety systems has become obvious. To reduce the risk that potential incidents pass the erected safety barriers, the safety system must be secured from technical, but also from a people/behavioral point of view.

In recent years several safety standards have been developed, describing the interaction of safety elements. However, these only scratch the surface when it comes to describing proactive safety systems and the proactive use of (leading) KPIs.

To fi ll in the gap of advanced management systems, Kienbaum Management Consultants and TÜV SÜD have developed the “Process Safety Control System” based on the “Swiss Cheese Model” and several leading norms like CCPS, API-751, HSE and OSHA. The main purpose of the unique safety system is to reduce the chance of major incidents, undesirable events and to improve the operational performance by modeling a set of barriers stacked together side by side.

654321 321

License to operate

Process safety v

ision

Audit and compliance

Performance management

Preventive barriers

Mitigation & control

63

Operationalintegrity

Emergency procedures

Technical integrity

Design integrity

Safety culture

Undesirableevent

Majorincident

Laggingindicators(Tier1and2)measure barrier defects (holes), events and consequences

Leadingindicators(Tier3and4)maintain barrier strength, i. e. activities to maintain risk control system

Fig. 3: The "Process Safety Control System"

Processhazard

potential

The four “preventive barriers” (safety culture, design integrity, technical integrity, operational integrity) need to be in place to prevent an undesirable event from happening. The fi nal barrier “mitigation & control” (reduction of consequences) prevents an actual undesirable event from becoming a major incident. The “foundation layers” (performance management, audit and compliance, process safety vision, license to operate) are the baseline of the process safety control system, affecting the barriers above.

Fig. 4: Elements of the Process Safety Control System

The different barriers as well as the foundation layers can be described as a set of procedures – the toolbox for process safety. Companies need to manage all proposed barriers and their associated procedures in a coherent way to embed process safety excellence and to consider both process safety aspects – the technical and the human elements.

Performancemanagement(Incident investigation, management review, measurement and metrics)

Technicalintegrity» Operational readiness» Contractor management» Management of change» Asset integrity

and reliability

Operationalintegrity» Operational procedures» Conduct of operation» Safe work practices» Training and performance

assurance

Designintegrity» Process hazard analysis» Process knowledge management

Reductionofconsequences» Emergency management

» Contractor management» Management of change

» Operational procedures» Conduct of operation» Safe work practices» Training and performance

assurance

» Process hazard analysis» Process knowledge management

Reductionofconsequences» Emergency management

Safetyculture» Stakeholder outreach» Compliance with standards» Process safety competency» Process safety culture» Workforce involvement

Auditandcompliance

Technicalaspects

Licensetooperate

Humanaspects

Processsafetyvision

8 9Process Safety Excellence

The shift from only technical to the human focus thinking demands that proactive safety behavior becomes part of a company’s DNA. Therefore, one inevitable management task is to embed and to apply the philosophy of continuous process safety improvement in the company’s culture.

All process safety components are dynamic capabilities, which must be controlled, refi ned and adapted regularly for occurring changes. The originating shortcomings and weaknesses of the barriers and procedures must be improved by regular structured performance management.

Based on the identifi ed hazards in plant and processes, Kienbaum Management Consultants and TÜV SÜD support the development of specifi c tailor-made leading KPIs based on reviewed and improved management processes. These KPIs enable the management team to recognize “unsafe situations” and prevent incidents by short-term decisions based on well-grounded information and real-time risk analysis.

The performance management framework (see fi g. 5) allows management to improve processes continuously (CIP), to communicate accurately on the foundation of up to date information, co-operate with each other in achieving a common goal and stimulate improved safety levels. The system works with an effective meeting structure based on the Forecast – Plan – Control – Report circle as well as a management review, based on the Data – Analysis – Decision – Action cycle. The input for the management review is the reporting based on KPI’s and audit and compliance procedures.

Fig. 5: Philosophy of continuous improvement

Today

Short-comings,

weak-nesses

Tomorrow

Improved barriers

Tomorrow

Continuousimprovement

Meetingstructure

Plan» Production planning» Prev. maint.

Planning

Control» TPM meeting» MT meeting» Maint. rev. meeting» Production meeting

Forecast» Budget» Corporate

strategy

Report

strategy

Report

KPIs

Managementreviewinthemeeting

Analysis» BPST

Data

Decision» Meetings

Action» Action logsAction» Action logs

CIP

Audit&compliance: Audit & compliance analyzes the status of the "Process Safety Control System". It identifi es gaps and weaknesses and evaluates the process safety procedures to recommend corrective actions. On the basis of the evaluation, the company's process safety program is attached to one of the fi ve valuation level of process excellence.

Perf

orm

ance

man

agem

ent

» Management KPI report» PSE dashboard» Profi l & loss report» Cockpits

»Howcanacompanyachieveprocesssafetyexcellence?

The critical and most important success factor to achieve process safety excellence is the effective and effi cient imple-mentation of a process safety program. Kienbaum Management Consultants and TÜV SÜD joined their expertise to create a new implementation approach. The approach combines the strength of both companies: On the one hand Kienbaum Management Consultants’ widespread expertise in cultural change, performance management and sustainable implemen-tation and on the other hand the comprehensive technical and safety know how of TÜV SÜD.

Besides the fact that the implementation procedure enables a company to reduce the risks of incidents signifi cantly, the new approach supports you on your journey to proactive PSE. Combining the strength of both companies allows the development of a tailor-made implementation process to overcome specifi c issues and to embed PSE in all kinds of companies.

The combined expertise recognizes that besides the technical aspects, the human issues must be placed in the centre of PSE programs. The employees’ behavioral change in the day-to-day involvement with all hazardous processes is indispensable for an effective and sustainable embedded process safety management system.

Fig. 6: Sustainable implementation

Baseline:setexpectations Implementation:behavioralchange Result:PSEDNA

Proc

ess

safe

ty

exce

llenc

evi

sion

Sustainable embedded

process safety excellence

Barriers

People

Foundation

Technical barrier change

Foundation

» Every employee needs to live and breathe process safety.» The employee needs to feel and be personally responsible for his/her part of process safety.» Be a role model by making process safety real (felt & understood) to others.» The employee shows personal attendance to process safety e. g. "process safety walk and talk"

of leaders.» All structural elements are in place to support the targeted change of process safety.

Performancedrivebehavioralchange

10 11

A fully fl edged and tailor-made implementation builds the groundwork to align the employees’ behavior with the philosophy of a PSE focused company. The tailor-made approach works like glue, linking together the various safety elements as well as technical details and human and management aspects. It helps to overcome the technical barriers by the employees’ behavioral change and accelerates the journey to reach process safety excellence.

Thestructureincludesthreephases:»FirstPhase: Scoping, baselining (including project defi nition)»SecondPhase: Implementation and embedding all processes sustainable»ThirdPhase: Stabilization and certifi cation

Fig. 7: End-to-end-implementation approach

Using the end-to-end implementation approach, specifi c tools and the widespread expertise, Kienbaum Management Consultants and TÜV SÜD identify the company's actual process safety level with all safety issues. Building on this, the experts develop tailor-made procedures to improve the company's process safety program enabling the company to ascend the different levels of process safety step-by-step to realize the change to a PSE driven company.

Designintegrity

Operationalintegrity

Peoplecapability

Maintenanceintegrity

Description:Risk and defect analysis of ...» Technical processes» Risk mgmt. & control system» Behavior & attitude

Results:» Effectiveness of PSE mgmt.

system & people behavior clear» Missing elements identifi ed

immediate mitigation activities to close gaps identifi ed

» High level description of levers

Analysisphase

Designintegrity

Operationalintegrity

BaseliningDuration: 6 weeks

Description:Develop for each identifi ed opportunity a plan how to upgrade

Results:» Process safety mgmt. system

implemented on all levels with concise/simple KPI pyramid

» People "live" process safety » Technical processes reach

defi ned safety levels» All elements ready to be certifi ed» Continuous improvement

process safety implemented

"Closingthemajorgaps"

Operationalintegrity

Peoplecapability

Implemen-tationproject

Duration: 6-12 months

Description:Certifi cation by TÜV Süd of:» Process safety level» Process safety mgmt. &

control system» People process safety

behavior & attitude

Results:» Verify that the processes,

procedures and practices developed under the standard are adequate and are being followed

Improvementprogram&certification

Peoplecapability integrity

Stabilizationphase

Duration: > 3 years

End-to-endimplementationapproach

Fig. 8: Ascending the stairs to excellence

To reach each of the fi ve levels of process safety, the company’s process safety control system needs to achieve different requirements:

A company at the fi rst level needs to understand the purpose of a performance management system and its activity is oriented to meet the minimum requirements of process safety (e. g. fi refi ghting standards). At the second level a company’s thinking is process oriented and starts with the stabilization of the developed management system using the documentation and the management of safety procedures and processes. To reach the third level, a company should be system oriented and start to compile sets of data for the continuous and sustainable improvement. At level four, the enhancement of the entire process safety management system is realized by the continuous improvement process. At the fi fth level, the company is excellence driven and perfects the application of process safety management to realize the vision of process safety excellence and reach the main target of the introduced process safety management system.

The main target of the end-to-end implementation is that employees start to “live” process safety in their day-to-day operations and the technical processes reach the desired safety level. In this way the idea of PSE will be sustainably implemented in the DNA of an organization.

Vision of processsafety excellence

End-to-endimplementationapproach

Purpose of theperformance managementsystem is understood

The system is developed and all elements are in place

Continuous improvement starts by questioning data

Organization starts to drive improvement

Excellence driven

Rollout Safetyculture

Hazardanalysis

Design

Control&prevention

Reductionofconsequences

Audit

Performancemeasurement

Communicationandescalation

Safetyexcellence

PCS

leve

lof

impl

emen

tati

onM

anag

emen

tto

ols

Level of process safety ambition

BasicsLevel 1

StabilityandmanagementLevel 2

SustainabilityLevel 3

ContinuousimprovementLevel 4

ProcesssafetyexcellenceLevel 5

Leve

lof

exce

llenc

e

12 13Process Safety Excellence

»Theresultoftheimplementationofprocesssafety

You always have to keep in mind that process safety incidents are rarely caused by a single catastrophic failure, but rather by multiple events or failures that coincide. It is useful to consider process safety as the outcome of a wide range of technical, management and operational disciplines coming together in an organized and structured way. Therefore the introduced process safety control system, based on five safety barriers, has been developed to support a company on its journey to process safety excellence.

The end-to-end implementation approach enables a company to improve their specific safety issues and to realize the change to a process excellence driven company. The combined expertise of Kienbaum Management Consultants and TÜV SÜD as well as their specific tailor-made tools and procedures are holistic success factors for the sustainable implementation of process safety.

Combining the introduced management framework and the end-to-end implementation as glue of technical and human aspects embeds PSE as a sustainable part of the company’s culture. The structural managed behavioral change is the central and most promising fact for ascending the stairs of PSE and adding its idea and competences finally to the DNA of the organization.

14 15Process Safety ExcellenceProcess Safety Excellence

Barriersprocedures Description

Process safety culture The process safety culture determines the actions and procedures of the company and the company’s employees for managing process hazards.

Compliance with standards Compliance with standards describes the development of a readily accessible system, which ensures, that the process safety procedures comply with national and international standards, regulations and laws.

Process safety competency Process safety competency assures that competent employees will perform the proper action in peculiar situations.

Workforce involvement Workforce involvement provides a system to implement a consultative relationship at all levels and integrate employees in the process safety management program.

Stakeholder outreachThe objective of a stakeholder outreach program is to promote openness and responsiveness to build trust and commitment to other companies. This is necessary to encourage the sharing of relevant information and lessons about process safety.

Process knowledge management

The primary objective of process knowledge management is to maintain accurate, complete, and understandable information and to ensure that the information is up to date and ad-hoc available.

Process hazard analysis Hazard identification and risk analysis is a review process to make sure that all hazard are controlled within the organization’s risk tolerance.

Operating procedures Operating procedures list the steps and procedures as well as the containing methods for hazardous operating processes and associated emergency shutdowns.

Safe work practices Safe work practices provide an integrated set of systems, like policies and procedures, which are designed to manage risks associated with non-routine activities

Asset integrity and reliability The asset integrity & reliability element is the systematic implementation of activities that prevent or mitigate catastrophic releases and the associated effects.

Contractor managementContractor management is a program to ensure that contracted services do not present new hazards to the facility. This is achieved by a continuous alignment of the company and the contractor, who is fully aware of the necessary process safety procedures.

Training and performance assurance

Training and performance assurance is a process to enable employees to meet the relevant process safety performance and to identify critical aspects as well as requirements for additional trainings.

Management of change (MOC) The procedure of management of change assures that changes being installed are traceable. In this way a company can preclude the introduction of inadvertent new hazards or the increase of unknowing risk of existing hazards.

Operational readiness Operational readiness focuses on the safety review to ensure that processes are verified regarding safe conditions for the start-up and initial commissioning of a new process or the re-start of a modified process.

Conduct of operationsConduct of operations is the execution of operational and management tools in a deliberate and structured manner in order to institutionalize the pursuit of excellence in the performance of every task and minimize variations in performance.

Emergency management Emergency management covers the formal emergency response and crisis management to reduce and to handle the consequences of undesirable incidents.

Incident investigation Incident investigation is a framework for reporting, tracking, and investigating incidents and near misses to ensure that lessons are learned and feedback is provided on the effectiveness of the process safety control system.

AuditThe audit element provides a system for periodic evaluations of all process safety elements by a defined review process. Besides identifying weaknesses in the process safety system, the audit element manages the resolution of findings and corrective actions.

Measurement and metrics The measurement and metrics element establishes performance and efficiency indicators to monitor the near-real-time effectiveness of the process safety management system and its constituent elements and work activities.

Managing review

The management review is a routine evaluation whether the management system is performing as intended and producing the desired results as efficiently as possible. It is an ongoing “due diligence” by the management that fills the gap between day-to-day work activities and periodic formal audits. Out of the review actions will be taken to continuously improve the process safety management system.

»AboutKienbaumandTÜVSÜD

KienbaumManagementConsultants

» In the over 65 years since the founding of our company, we have provided over 60,000 successful consulting projects for our customers.

» We can rely on our workforce of 740 Kienbaum employees worldwide (end of 2011).

» With its turnover of € 57.5 million in 2011, Kienbaum ranks among the top 25 consultancies in Europe.

» We are proud to be counted among the top 100 employers.

PhilosophyofKienbaum

» Measureable benefits for our customers: seniority, industry and management experience and a track record of success-ful performance improvement projects (incl. management & reporting systems, IT etc.).

» Partner for the entire transformation process.

» We develop intelligent, integrated and realistic solutions for strategic challenges hand-in-hand with our clients.

TÜVSÜD

» Established nearly 150 years ago, TÜV SÜD today is a committed and responsible process partner with comprehensive industry knowledge.

» We focus on our core competencies of consulting, testing, certification and training.

» Over 18,700 staff optimise technology, systems and expertise at over 600 locations in Europe, the Americas, Asia Pacific and Africa.

» Generating consolidated sales of more than € 1.8 billion in 2012, TÜV SÜD ranks fifth among the world‘s leading technical service providers.

PhilosophyofTÜVSÜD

» “Choose certainty. Add value.” is the core idea behind the services we provide to our clients.

» As process partners with comprehensive industry know-ledge, our teams of specialists provide timely consultation and continuous guidance, thus optimising technology, systems and expertise.

» In this manner we enhance the competitive strength of our customers throughout the world.

Contact

MatthiasBreyFon +49 211 96 59-338Fax +49 211 96 59-335Mobil +49 172 881 04 83matthias.brey@kienbaum.com

KienbaumManagementConsultantsGmbHHafenspitze, Speditionstraße 2140221 Düsseldorf

www.kienbaum.com

Dr.RobertKauerFon +49 89 57 91-1277Fax +49 89 57 91-2886Mobil +49 160 360 23 40robert.kauer@tuev-sued.de

TÜVSÜDIndustrieServiceGmbHWestendstraße 19980686 München

www.tuev-sued.de/is

www.kienbaum.com