The Baker Panel Report - ABSA

BP management’s focus on personal safetyUntil very recently, BP’s executive and corporate refining management emphasized personal safety but not process safety. BP’s attention topersonal safety performance appears to have stemmed from two sources. First, personal safety statistics, unlike process safety statistics, arewidely tracked, benchmarked, and reported. In fact, OSHA requires that companies report safety-output metrics, such as fatalities, days awayfrom work case frequencies, and recordable injury rates—all of which are much more closely linked to personal safety than process safety. Formany years, BP and a number of its peers benchmarked their performance on these measures against each other. In effect, BP focused on themetrics that received regulatory and industry attention, but those metrics were safety output-oriented and bore little relation to the state ofprocess safety. For a discussion on BP’s measurement of process safety performance and its use of process safety metrics, see Section VI.C.Second, BP recognized that driving-related incidents have historically been by far the most frequent cause of workforce fatalities in BP’soperations. For example, in 2003, 70 percent of BP employee and contractor fatalities were driving-related, as were 90 percent of the fatalitiesinvolving third parties. As a result, BP’s executive management initiated a Group-wide effort to reduce vehicular accidents. To that end, BPpromulgated, and Browne approved, the Group driving standard in 2004. Pursuant to that initiative, BP tracked, benchmarked, and set targetsfor vehicular accident performance, such as severe vehicular accident rate, across all of BP’s businesses.The Panel is by no means critical of BP for focusing on personal safety. Given the nature of BP’s global businesses, the majority of BP’s injurieshistorically have been personal safety-related. The Panel’s concern is that BP’s safety focus has been almost exclusively on personal safety tothe exclusion of process safety. BP’s focus on personal safety is evident in BP’s performance contracts, reports prepared at various levels of thecompany to track refinery performance, and the absence of clear process safety metrics and performance expectations for the individualrefineries.BP uses a system of cascading performance contracts and variable pay programs to drive desired conduct. 14 Given the importance ofperformance contracts and variable pay programs to achieving BP’s goals, the metrics and milestones included in them are critical. As anaphorism recognizes, “what gets measured gets managed.” Prior to 2006, performance contracts and variable pay programs in BP’sU.S. refineries contained primarily personal safety metrics and milestones but did not contain metrics that would act as a significant positiveincentive for ensuring process safety performance. In fact, some of BP’s historical metrics and milestones in performance contracts andvariable pay programs may have had a negative influence on refinery process safety performance.The Chief Executive, Refining and Marketing determines which HSSE metrics must be considered for inclusion in performance contracts ofgroup leaders in the business units within the Refining and Marketing segment, including Refining. Prior to 2006, the only safety-related metricin his own personal performance contract was days away from work case frequency. Through 2005, the only safety metrics in performancecontracts for refining corporate management were recordable injury frequency and severe vehicle accident rate. Recordable injury frequency,like days away from work case frequency, is a commonly reported output measure associated with personal safety. Including severe vehicleaccident rate as a safety metric furthered the goals of the Group driving standard, but had little to do with refining safety. These performancecontracts did not act as a direct incentive for refining corporate management to ensure strong process safety performance in the U.S. refineries.The performance contracts for U.S. refinery plant managers generally tracked the same metrics as the performance contracts for refiningcorporate line management. For example, the 2005 performance contract for the Texas City plant manager contained HSSE targets forrecordable injury frequency, severe vehicle accident rate, oil spills greater than one barrel, and greenhouse gas emissions. With the arguableexception of oil spills, none of these metrics is process safety-related.Corporate Safety Culture C 69