Seminar 4 Case Study 2

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Seminar 4 Case Study 2

• The routine nature of death at work
• An offshore worker
• Gordon Mackie Moffat

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HSE, Safety and the Oil Industry

• Charles Woolfson

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Gordon Mackie Moffat Deceased 9th October 2000

• Santa Fe Magellan rig operating 120 miles east of
  Aberdeen in the Elgin/Franklyn Field
• On contract to TotalFinaElf Exploration UK
• An assistant derrickman and a member of C Crew
  (one of four crews)
• Task of securing hydraulic hoses to the casing of
  part of the drilling apparatus
• Man-riding - suspended in mid-air in a sling
  attached to a winch line, approximately 40-50
  feet above the blowout preventer (BOP) deck

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(No Transcript)
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Supervisory failures

• absence of a proper tool box talk before the
  commencement of the fatal man-riding operation
• absence of a proper risk assessment of that
  man-riding operation
• absence of a proper risk assessment of the
  variation that occurred part the way through
• failure to stop the work on the drill floor while
  the man-riding operation was taking place
• failure to allocate a supervisor on the drill
  floor
• failure to allocate a man to the mouse hole
• no assessment of suitability of available
  personnel
• no allocation of roles according to that
  assessment
• no mutual awareness of each crew members role
• no allocation of supervisory function

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Management Failure

• Sheriff McLernan
• The deficiencies in the prescribed system viz.
  the absence of significant elements from WWI, the
  lack of clarity, and the lack of effective radio
  communication procedures were not in my view the
  primary cause of the accident. The primary cause
  was the almost total lack of proper supervision
  by the persons delegated to supervise.
• Alexander Kemp (on behalf of the relatives of the
  deceased)
• The picture that emerges is of an accident that
  was waiting to happen. There really were no
  effective controls in place. The system of
  management of safety, if it ever worked, had
  broken down. That caused a wholly avoidable fatal
  accident.

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Management in the Offshore drilling industry

• Magellan not atypical installation-
• Profit and results-driven ethos of industry
• History of authoritarian management
• Legacy of victimisation and NRB
• Lack on unionisation
• In theory, Time out for Safety
• Reality, inadvisable and might carry
  reprecussions
• Suppression of workers voice

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Attitudes and Culture

• Sheriff McLernan-
• unless there is elimination of the attitudes
  which were primarily responsible for the
  occurrence of this accident - there is a real
  risk of further serious accident.

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Business interrelations dependency and ambiguity.

• Major oil companies constitute the client
  organisations.
• In turn, they subcontract many of the specialist
  services to a variety of sub-contractors.
• These sub-contractors drill for oil and provide
  many specialist functions on an out-sourced basis
  for offshore installations.
• The oil companies retain direct responsibility,
  mainly for the core group of their own employees.
  
• Such arrangements provide the oil companies with
  both numerical and functional flexibility,
  allowing them to adjust their operations to
  changing production and demand requirements.
• An offshore installation is, therefore, often a
  multi-employer site in which the safety
  performance of individual sub-contractor firms
  is, in theory, monitored in its own right by the
  client company.

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Legal duty of care

• The main employer is responsible in law for the
  safety and health of everyone on the platform
• employers obligations overlap with those of the
  sub-contractor who is also responsible for its
  own employees' welfare.
• Under the Health and Safety at Work Act of 1974,
  the main employer must take responsibility for
  its own workers and for those of the
  sub-contractors who may be affected by its
  operations.
• Ambiguity arises when it comes to determining who
  should take major responsibility for ensuring
  that there is an adequate level of knowledge and
  training to allow the sub-contractor's employees
  to perform their work safely.
• This entails not just what the sub-contractor
  employees do, or do not do, but what those around
  them do, whether they are employees of the same
  sub-contractor, of another sub-contractor, or
  direct employees of the client oil company.

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Structural determination of managerial failure

• The wider complex context of the nature of
  business organisation in the offshore oil
  industry
• Typical contractual and financial arrangements
• Multiple complex of business interrelations
  between client and subcontractors acts to
  minimise economic risks at each stage of the
  business structure

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The organisational web risk transfer mechanisms

• Organisational legal proliferation - acts as a
  parallel structure of occupational risk transfer
  mechanisms intrinsic to business relations
• Even where there is an identifiable employer, the
  company itself operates through a variety of
  other subsidiaries which are legally independent
  entities for some purposes, but not necessarily
  for others.
• This chameleon-like legal identity creates
  endless uncertainties over boundaries as to
  where, for example, the ultimate responsibility
  lies in safety and health at work.

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Santa Fe A Russian doll

• Mr Moffats legal employer - Santa Fe
  International Services Inc, Panamanian company.
• The rig on which Mr Moffat worked operated
  through Santa Fe subsidiary, Santa Fe Drilling
  Company (North Sea) Limited, registered in
  Lowestoft - held the Safety Case for the
  installation.
• Santa Fe Drilling Company (North Sea) Limited
  also had the responsibility as the duty holder
  in law for the operational safety aspects of the
  Magellan rig.
• Further Santa Fe subsidiaries were actors Santa
  Fe International Services Inc. and Santa Fe
  Technical Services (North Sea) Ltd.
• Santa Fe Technical Services (North Sea) employed
  the Rig Manager and health and safety advisors
  based in Aberdeen.

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HSE The Regulatory Response

• Offshore Safety Division (OSD) now part of
  Hazardous Installations Directorate - set up in
  the aftermath of Piper Alpha to oversee the
  implementation of a new Safety Case regime.
• Safety case requires the management responsible
  for each offshore installation act as duty
  holder, to carry out a comprehensive and
  documented appraisal of risk factors.
• HSE also issues periodic advice to duty holders.
• OSD had issued a Safety Notice in May 1997
  stating that man-riding operations that are not
  routine should be subject to the duty holders
  permit-to-work system.
• Subsequently OSD issued an industry-wide Safety
  Alert (2000/1) Man Riding Winch Units,
  highlighting problems as a result of the
  incident, need for a suitable and sufficient
  assessment of risk, reviewing equipment and
  procedures and the means by which all winch
  motions can effectively and rapidly be brought to
  a halt.

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HSE and the judicial authorities

• The regulatory authority has a duty to ensure
  that the law, in respect of the Health and
  Safety at Work Act (1974) is applied, and that
  sanctions are sought, where it is merited
• HSE has the power to make recommendations to the
  Procurator Fiscal in Scotland for criminal
  charges to be brought

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Possible charges under existing UK law

• Santa Fe ignored previous HSE advice - a repeat
  offender.
• Competent charges against three sets of actors
• The employer registered in Panama, Santa Fe
  International Services Inc, under Section 2(1) of
  the Health and Safety at Work Act and Regulation
  3(1)(a) of the Management of Health and Safety at
  Work Regulations
• the duty holder, Santa Fe Drilling company (North
  Sea) Ltd under Section 3(1) of the Health and
  Safety at Work Act and Regulation 3(1)(b) of the
  Management of Health and Safety at Work
  Regulations
• The individual executive deemed responsible for
  the safety failure, Roger de Freitas, the
  managing director of Santa Fe Drilling company
  (North Sea) Ltd, under Section 37 of the Health
  and Safety at Work Act.
• If successfully prosecuted on indictment, these
  charges could carry unlimited fines, or a prison
  sentence.

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The plea negotiation

• Shortly after the incident Mr de Freitas departed
  UK jurisdiction
• Charges did not proceed to trial under criminal
  justice system
• The Fiscals office engaged in what is referred
  to as plea negotiation with Santa Fe -
  agreement entered into about what charges will be
  pled to.
• The Fiscal agreed with Santa Fe what facts and
  circumstances he would present to the Court and
  what mitigation they would put forward in their
  defence.
• Santa Fe Drilling Company (North Sea) Ltd entered
  a guilty plea to lesser charges which did not
  include a Section 37 offence.

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The prosecution failure

• The Section 37 indictment - in line with the
  publicly stated enforcement policy of the HSE and
  HSC (Health and Safety Commission) and in line
  with the stated expectations of the Government
  and current expectations of the public (with
  respect to corporate accountability).
• Not in the public interest that employers in the
  UK, who are based abroad for financial reasons,
  cannot be brought before the Court.

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Corporate avoidance and Corporate Homicide

• Prima facie grounds for a prosecution of Santa
  Fe under a corporate homicide law
• One month after court, Santa Fe awarded
  Compliance Document in Houston ceremony
• one of the first offshore drilling contractors
  to receive the full International Safety
  Management (ISM) certification for its
  shore-based facilities and self-propelled
  offshore rigs.

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The penalty for the death of Gordon Mackie Moffat

• Fine at Aberdeen Sheriff Court 60,000
• Santa Fe declared net income for 2001, the year
  of their court appearance - 377.8 million