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Abstract

Tremendous improvement has been made in the safety performance of the upstream exploration and production activities of our industry in the recent past. The oversight of contractor performance by the operators as well as advancement in technology risk management and hazard awareness are all key elements of this success. The results mean we have a safer work environment and a continuation of our license to operate.

However, one of the recent trends in contractor oversight by operators has been the delegation of the HSE performance evaluation from the HSE function to Procurement. Although this migration incorporates HSE into the business (which is always welcome) it may have negative consequences based on knowledge and competency of the issues. In question is the process of assessing the safety performance of contractors without understanding of the risk profile. Another concern is the assumption the method of collection of inputs is comparable since injury rates are derived using a common formula. This can put stress on a system that is not necessarily absolute.

A better method of evaluating HSE performance would be to include a balance of leading and lagging indicators as well as an investigation of the policies and programs that lead to the overall performance of the contractor. With a more comprehensive evaluation, there will be a better understanding of relative performance of the contractors including their weaknesses and strengths. A more comprehensive evaluation will also place less stress on the lagging indicator measurement system.

Introduction

The noticeable improvement in overall safety performance of the upstream exploration and production manifests itself in decreasing injury rates^1,2 . Driving improvement are technological advances, better identification and management of risk, and safety management systems; along with the increasing oversight and expectations of operators for the contractor community. This oversight is critical for operators as the contractors represent a majority of the workforce exposed to the risk of daily operations and therefore affect the safety performance of the operator^3,4,5.

As attitudes towards the management of safety have evolved from acceptance of the risk, to concern over performance to active management, oversight programs have evolved as well. During the incipient phases of active management, the HSE function within operators typically oversaw creation of the evaluation methods. These evaluations can, and in some cases did, become more sophisticated⁵. Contractor performance, in these situations, was measured against a standard, and when the lagging indicators were above pre-determined limits the contractor had to implement improvement plans or other measures to be eligible for work³.

Guidance for assessing vendors from industry groups⁶ and the participation by a wider variety of operators indicate that the process and necessity for evaluating contractors is well established. Another indication that the process is widely accepted is the integration of evaluation into the standard business practices of vendor management within the procurement function. This transition means that the evaluation of performance has become just one of the key elements in routine contracting of work.

New Directions and Emerging Issues

As the procurement functions begin to take over the role of evaluating contractors, and the overall increased focus on measures, several issues begin to emerge. The first issue is the pressure put on the gathering and reporting of performance measures by contractors as well as full understanding of the meaning of the numbers. Secondly, many companies have overlapping or redundant evaluations of contractors at global, regional and local levels. This redundancy occupies resources and is very inefficient for both organizations.