The Baker Panel Report - ABSA

The focus of the assessment, which largely stressed environmental compliance, was to determine whether “external HSE legal and regulatoryrequirements [are] effectively embedded into [BP] management systems . . . .” The consultant made the following observations in its 2000report: In BP’s HSE Management System (Plan, Perform, Measure, Review); Plan and Perform are most strongly embedded; Measure andReview are the weakest. There is only partial implementation of a Compliance Assurance Process through the US Streams. Downstream HSE staffing levels appear to be below needed levels. Issues and work needing attention are often delayed and/orsometimes omitted.In December 2002, executive management requested further review of the compliance process in the United States. This review was “requestedto verify the current status of HSSE management systems from a cross section of US facilities.”BP retained the same external consultant in 2003 to again evaluate its compliance management system. BP initiated this second review to testimprovements that operating units had made to address the gaps identified in 2000 and because HSE assurance reports in 2002 showed thatBP’s fines for noncompliance with HSE regulations were rising, with the majority coming from U.S. operations. BP’s perception of how itcompared with its peer companies was another basis for the review. A document establishing the terms of the review noted that BP’scompetitors in the energy and chemical industries “have implemented (or are implementing) compliance management . . . systems which aresubstantially more detailed than BP’s.”The review had several key findings, which were reported to the BP Group Chief Executive’s Meeting on June 25, 2003. The review concluded thatBP was applying sound compliance standards and practices and that levels of compliance assurance were improving. Although the reviewfound improvement since the 2000 assessment, it also found that compliance system gaps between facilities and business groups remained.The review also concluded that “BP—US systems and efforts [were] not as developed as [BP’s] competition’s systems and efforts.”In addition to these key findings, the review provided results and causal factors for specific aspects of the continuous improvementperformance cycle across different parts of BP. The causal factors that the consultant identified were related to BP’s overall HSSE managementsystem and were not specific to process safety. Nonetheless, the Panel considers some of the causal factors from the 2003 report to be relevantto the Panel’s review: Line personnel are not held accountable for compliance with all HSSE legal requirements. The full gap in HSSE compliance is not well understood by management. A systematic approach is not used to determine, interpret or document compliance requirements. Reliance on certain key employees for compliance knowledge. Knowledge of HSSE compliance requirements is not viewed as a critical business need. Management has not requested results on HSSE legal compliance performance. Audits and inspections have been viewed as the preferred method for measuring HSSE legal compliance performance. BP culture promotes pushing accountability for HSSE to the business unit, and has not established an effective HSSE legalcompliance assurance process. BP’s culture promotes autonomy in the business units, therefore, not requiring the use of a common action tracking method by allU.S. locations. BP’s culture is very “action” oriented, and systematic improvements are not stressed when closing out HSSE legal compliance actionitems. Using action items and their root causes as a method for predicting future occurrences is not a strategy that is recognized norutilized across the Segment. Compliance with all HSSE legal requirements has not been emphasized as a minimum expectation.Performance Evaluation, Corrective Action, and Corporate Oversight C 230