Update August 2010

The Deep Water Horizon

The tragic accident in the Gulf this year will probably be another test of public and legislative intolerance of accidents causing oil spills.
It’s likely that the Deep Water Horizon incident will affect shipping as well as the oil industry. Although limits of liability have not yet been raised, other measures for scrutinizing the oil transport value chain are likely to be applied.
The most probable targets besides liability and blame will be operating practices, decision making and risk management of subcontractors. The latter is likely to include the tanker industry and its subcontractors.

More demands from tanker shipping?
How could scrutiny of subcontractors be applied to tankers? Additional measures to ensure co-ordination of pilots and tugs could be one way. More instruments and automation is possibly another: for example consolidated instrumentation in the engine room and for the whole vessel rather than the current fragmented systems found on most ships. More instruments in general mean more measurable and better distributed early warnings. But the area of application is huge and since the recent accident was not even on a tanker it’s hard to imagine how any particular area of a vessel could be targeted.
Another way is the recent widespread practice of documenting risk assessments for ISM. These risk assessments are likely to be scrutinized more closely and used to launch continuous improvement initiatives.
So waiting and seeing what will be demanded of the tanker industry either by regulators or the oil companies themselves is the logical action to take.

Chartering in and even more onerous vetting
In a competitive charter market however, with more and more deliveries of tankers perhaps the new measures taken in particular by oil companies will not be overt. Just more of the same vetting and TMSA scrutiny, new areas of attention periodically applied, and perhaps more chartering in rather than spot employment of tankers. Certainly chartering in on some sort of period or consecutive employment is getting more popular either because of long term anticipated rises in freight rates or due to a need for more controlled pools of subcontractors for oil company transport. So TMSA on steroids is likely to come sooner or later. What can this mean practically?

How could TMSA and vetting get tougher?

  • An easier and more explicit audit trail for all TMSA related action?
  • Scrutiny of risk assessments for change management action taken to minimize recognized risk?
  • More sophisticated Key Performance Indicators (KPI)?
  • More stringent KPI?

TMSA in simple words is another quality management initiative

It adds to the time it takes to manage a shipping company unless processes are optimised in a professional and intelligent manner.

Different styles of QA systems
Quality Assurance systems vary a lot even in a mature business such as oil transport by sea.
There are many reasons for this; at the most general level, we could perhaps see the way measures are applied to mitigate risk as falling into two camps:

  • Scripts: One way of mitigating risk is to design procedures very carefully and then implement them with intense diligence so that process risk may be reduced. This is more like an orchestra which practices every tune extensively. It assumes that there is a perfect procedure suitable for any circumstance with the entire staff well-practiced in it.
  • Awareness: Another way is to build awareness through continuous discussion of risk and goals conflicts that are at the root of most risks. This is more like a set of musicians who improvise a lot but have a high degree of understanding of the music they play as well as each other’s skills, decisions or choices and favorite themes..

Both methods work well when applied to the right process. In aviation the discussion of risks and near misses is considered more important than procedures. Also procedural changes are considered to be a highly collaborative and controlled process.
In the shipping industry, sometimes procedures are more wish lists than ways of working; perhaps less so in tankers but certainly in the rest of the industry. It’s easier to write what you would like to happen than to design a new way of working and convince hundreds of people to adopt it.

This is just one area of contention. Safety Management has many more.
There are people who advocate measurements of trialing indicators such as statistical KPI which work well in manufacturing, logistics and other highly scripted and measurable processes. Others prefer monitoring near miss reporting and observations although observably these are only generated at a personal safety level rather than at a process and business level- personal safety often being the only QA activity that is not intertwined with commercial and technical operations and thus the only area where the quality manager has free reign.
So the style and emphasis in safety management is often very different from company to company.

Now that we have discussed some of the differences let’s see what the common factors are:

  • Everyone needs to demonstrate competence to the oil company in managing risk and therefore record keeping is essential to all.
  • Everyone needs to have procedures which all stakeholders find themselves in agreement with before these are implemented. So discussion of change is essential to all.
  • Everyone needs to have procedures understood fully. So well disseminated descriptions of procedures is essential as are the reasons why they have been adopted, the problems that have occurred that led to the changes, the lessons learned etc.
  • Everyone needs to have widespread awareness of risk in every process

The Role of Technology
Technology can of course help here. It is certainly not a substitute for innate awareness of risk but it helps to develop this awareness just like a good coach watches a trainee and intervenes with the right information to match the trainee’s action. Technology is unable to watch people and understand what they are doing in the physical sense like a coach can, but it can certainly understand the exchange of records and status of systems based on data feed.
More conventionally, technology can keep records of well executed processes to demonstrate competence, distribute and manage discussions, disseminate procedures, disseminate lessons learned, etc.

So technology is very likely to be a part of a further drive to implement high standards of decision-making and better mitigation of risk in the tanker industry. Without technology the process of demonstrating competence and managing risk could be very time-consuming and expensive. Imagine calling a meeting to manage the discussion of change in a procedure in the way that a ship approaches a US Gulf port and having to pull people out of meetings and have phone conversations over satellite voice-channels to discuss the changes. How much would that cost? Then multiply that by every discussion needed to improve risk management onboard and ashore. Compare that to an orderly discussion electronically managed whereby each item is dealt with by each stakeholder in his own time and convenience.
Then, onboard the ship, imagine trying to grasp how a procedure may be different from what you expect and the reasons that led to the change, if all you have is a final copy of the procedure and a few cryptic legally cleansed words about why the change took place.
Imagine the senior manager with 25 ships to take care of, having non conformance reports and other observations that are granular and detailed all routed to him regardless of subject or impending risk while. Imagine trying to filter this information without proper technology.

So we feel that the technological tools at hand are capable to improve efficiency in operations, enable better decision making as well as effective risk and change management in any situation. A tragedy like the Deep Water Horizon affects us all deeply and affirms the industry’s resolution to raise quality and safety standards.