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Major Hazards Conference

Malcolm Wicks MP,  Minister of State for Energy
QEII Conference Centre,  29 April 2008

I’d like to start by thanking the Health and Safety Executive, not just for organising this conference, but also for their work with high-hazard industries to maintain some of the most effective and proportionate regulatory regimes in the world.

The diverse industries that make up the major hazard sector have a powerful impact on our every day lives, whether for example researching and developing vital new medicines, delivering products or services that improve our way of life, or, in my own sector, producing and transporting energy supplies.

Together these businesses contribute billions of pounds to our economy, generating investment and innovation that helps our economy grow, and providing hundreds of thousands of jobs. Businesses like yours can help our society prosper in the decades ahead.

But as you know, your ability to do so – in effect, your license to operate – depends on public trust: the belief that you and your companies will work safely.

As businesses, competing in the global marketplace, it’s self-evident that you need people to have the confidence to welcome you into their communities, to apply for the jobs you need to fill, to buy your products, and to invest in your companies. That confidence comes from well-targeted regulation and a strong compliance record.

We know the effect that just one major incident can have. It may be ruinous to productivity, disastrous in its effect on property, calamitous if it hits crucial national infrastructure. Worst of all, it may end human one or more human lives.

That one major incident can also, in minutes, destroy a good safety record and damage a business’s reputation.

So today, I want to emphasise the essential role that you, as business leaders, must play in building a strong, robust safety culture at every level of your organisations – to protect the public, your workers and the environment, and to ensure continued business success.

It’s impossible to eradicate completely every risk inherent in our society. But with constant vigilance and scrutiny, Government, regulators and business can work closely with each other to help minimise them in your sectors.

Together, we have already developed some of the world’s leading regulatory systems that demand the highest standards of operational behaviour possible.

These systems are built on the premise that you, the people who deal with these risks every day, are best placed to manage them.

They have helped us achieve one of the best health and safety records in Europe, and they have delivered the clarity and certainty your industries need to operate successfully.

But we can never be complacent. We can, and must always, strive to do more.

This year marks the 20th anniversary of the Piper Alpha tragedy. This incident claimed 167 lives, and still affects, twenty years on, not just the friends and families of those who died, but also the workers, businesses and communities involved.

The Texas City Refinery fire was one of the US’s worst industrial disasters in recent history. 15 people were killed and more than 170 injured. The incident resulted in financial losses of over $1.5 billion.

The explosions at the Buncefield Oil Storage Depot injured 43 people. In total, around 2,000 houses were evacuated. Losses for the 630 businesses located on an adjacent estate are estimated as between £91 to £114 million.

All of these incidents could have been prevented. The lessons to be learned from them are not new. Neither are they solely for industry. We all have our part to play.

The Department for Business will continue to work closely with you and other key bodies to maintain the balance of essential regulation and effective support your businesses need to operate safely and succeed.

An example of this is the work now underway, not only in my department but cross-Government, to review and take forward the recommendations of the Buncefield Major Incident Investigation Board. We will publish our formal response and plan for action later this year.

This is being delivered in parallel with the work of the Petrochemical Process Safety Leadership Group. With membership comprising industry experts, regulators, professional bodies, trade unions and trade associations, the PSLG is focussing on improving operating and professional standards and monitoring compliance with the Buncefield recommendations.

This is just one example of the work that’s now taking place across Whitehall and your industries to tackle these issues.

But ultimately every organisation’s culture is defined by its leaders.

The seven key elements of leadership identified by HSE, discussed here today, are essential to any high-performing organisation that wants to compete and win in today’s fast-paced economy.

Nowhere is this more true than in your industry, where the need to maintain and strengthen a positive safety culture is essential to any business’s continued success.

This is about far more than filling in forms, ticking boxes, or recording statistics. All major incident reviews, and countless texts on business, show that your employees look to you to set the tone, standards and example for safety management in your organisations.

In everything you say and do, your employees want to see and hear the proof that safety is a priority – in an open, no-blame culture, where positive safety behaviours are recognised, and where managers listen to and value input from employees when they question the effectiveness of existing procedures or equipment.

From KPIs [key performance indicators] to early warning systems, process safety management must be at the top of the Board’s agenda. Every level and area of the organisation must be accountable, committed to understanding and managing risk and meeting the highest possible standards of design, construction, operation and maintenance.

None of this is easy, of course. It requires a skilled and capable workforce. It presents you with a major management challenge when other issues such as the financial performance of the business, or the relentless pace of global change, may seem at least as pressing.

It also requires a willingness to learn and improve when mistakes are made, to share learning with each other and to look beyond your own sector and country for examples of best practice.

I know that much of this work is already taking place across the major hazards sector. Trade associations, business leaders, Government and other organisations do work together to raise awareness at all levels of industry.

Oil and Gas UK’s “Step Change in Safety” programme aims to make the UK the safest place to work in the oil and gas industry by 2010. Responsible Care represents the chemical industry’s commitment to continuously improve its health, safety and environmental performance. And across both the UK and international nuclear industries, operators are sharing knowledge, experience and feedback to ensure safety.

This includes the commendable work of the HSE, the Defence Nuclear Safety Regulator and the Nuclear Safety Directors’ Forum to agree a shared vision for the safe, secure and effective use and control of nuclear technology, while respecting the distinct and different roles and responsibilities of each of those organisations.

These initiatives all seek to promote learning between companies and active engagement with local communities. They are helping UK major hazard industries deliver on their Health and Safety commitments and retain the positive public perception they currently enjoy.

The hard lessons of Piper Alpha, Texas City, Buncefield and other incidents show that more can and must always be done.

There is no other industry where ensuring the highest standards of safety is more necessary than yours. As business leaders, you must set the example if safety is to be, and be seen to be, a priority at all levels of your organisations.

Winning the trust of your workforce, investors and the public in your ability to work effectively is critical to the safety of employees and local communities. It is integral to your reputation in the marketplace. It is even essential to the growth we must achieve as a country in the decades ahead.

Government, regulators, trade unions and trade associations stand ready to work with you to ensure compliance and beyond with the highest standards of safety possible. And together, we can help deliver a safe and prosperous future for your companies and our people.