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Leadership, commitment, and responsibility

The Regulator I Issue 3 I October 2021

NOPSEMA is implementing a program where we collect and review information relating to the degree to which senior executives and boards have sufficient oversight of, and accountability for, the control of major accident hazards.

Research in high hazard industries such as oil and gas reinforce the substantial influence incentivised target-setting and organisational reporting lines have on the proper identification, reporting and oversight of safety and environmental risks.

NOPSEMA expects senior executives and, where relevant, their boards to have oversight of the safety and environmental risks related or relevant to their facilities and activities, to be capable of understanding the risks and to be accountable for ensuring controls are in place to effectively manage the risks. Most importantly, NOPSEMA expects senior executives to manage the long-term low-likelihood, but high consequence risks to their facilities, in addition to any other operating or financial performance required.

Through its compliance monitoring activities, NOPSEMA has identified issues within the industry at an operational level that may have roots at the executive level. For example

  • decisions made prioritising projects that will increase production over routine or campaign maintenance activities leading to unacceptable levels of corrosion and degradation
  • management of change processes routinely misused to manage risks to the company rather than risks to the workforce and environment
  • failure to address NOPSEMA’s inspection findings until faced with the prospect of escalated enforcement action
  • significant job or operating budget cuts without due regard for work re-prioritisation, deferred maintenance, OHS and process safety
  • workforce reluctance to raise safety issues or ‘stop the job’ over safety concerns 
  • lack of support for the Health and Safety Representative role 
  • increase in workforce mental health related issues.

The examples above are potential symptoms of organisational structures and incentive systems that prioritise the mitigation of financial risk over safety and environmental risk.

NOPSEMA plans to review corporate scorecards and target setting for key personnel, transparency and visibility to senior management of relevant performance indicators, and the status of internal governance and oversight of operations responsible for safety and environmental management. Results from these reviews will be shared with company Chief Executives or equivalents and responses sought.

Page last updated: October 13, 2021 12:57pm