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Introduction

Accidents in any organization are not only harmful to the organization, environment and humans, but also often require structural, regulatory, and organizational change. The 2009 Montara oil spill in Australia is a case in point where accident resulted to regulatory reforms for the entire oil and gas industry in Australia. Various regulatory requirements were put in place as a response o the accidents which had been largely due to ignorance and non-adherence to the set standards. This paper therefore critically explores A New Policy Direction in Australian Offshore Safety Regulation by Hayes (2013), with the objective of indentifying flaws in the policy. This will be done through comparison with authority materials in the industry.

In brief, Montara was the worst offshore oil spill in the history of Australia, with oil and gas flowing for ten weeks and 90,000 square kilometers being covered by oil. According to the report by the commission of inquiry (Australian Government 2011), the cause of the Montara incident was as a result of the primary well control barrier failing. The commission further noted that initial problems with cementing were aggravated by the fact that only one of the required two secondary control barriers was installed. Despite these errors, it had been reported that for example, the two secondary control barriers were installed. The commission conclusion was among them, that existing regulatory framework at the time was adequate to control the blowout, but inadequacies by the regime in place at the time and the implementation of regulatory guidelines was largely to blame for the Montara accident. The recommendation therefore was regulatory reform to establish a single independent regulatory body that would look after safety as a primary objective, integrity of wells, and environmental management (Australian Government 2011).

 

Flaws in Hayes paper

Hayes (2013, 198) argues that the regulatory framework of the then time failed and thus, the Montara blowout. This is contrary to the conclusion by the Commission, which argued that it was the regulatory regime that failure, in other words, it is the implementation phase of the existing that that wasn’t done effectively. This therefore is considered to be a misleading background and foundation of the next part of the paper. It is interesting that, even Hayes lists a number of failures that were not observed in the case of Montara, despite the standard requirements stating otherwise. It is therefore clear that, the regulatory framework didn’t fail, in any case, the law cant fail if it is implemented thoroughly, but rather, it can only be inadequate as not to cover all the areas, hence the reason for continued revision of regulatory frameworks to cover new and arising challenges (Kerin 2015).

Hayes (2013, 203-204) recommends that because the risks and causes for accidents could be organizational related, then such should be controlled through; incorporation of organization issues into risk consideration, regulation of organizational issues, and demonstration of organizational safety cases and enforcement of self-regulation. In a nutshell, these three pass as simply recommendation for individual organizations on how to minimize or entirely prevent risks (Hopkins 2012; Lindøe, Baram and Patterson 2012). Essentially, organizations seek to prevent risks as they are costly to the organization, unless it is sabotage. These recommendations and based on the nature of the details, are best taken up at organizational level to ensure efficiency. At the state or national level, the regulatory framework would be more of license withdrawal for organizational failures as they signify incompetency (Lindøe et al. 2012).

The primary cause of the Montara blowout was the error in the installation of the cement shoe, and none installation of one of the secondary Pressure Containing Corrosion Caps (PCCC), and fluids in the well bore (Australian Government 2011; Hayes 2013). The policy by Hayes therefore is aimed towards preventing another Montara occurrence. That said, it is perturbing to note that, the cement shoes had been attributed to 18 of 39 blowouts in the US between 1992 and 2006 (Rosa, Renn and Mccright 2013; Rosness et al. 2012; Tharaldsen et al. 2011), and even with this statistic, no adequate corrective response had been installed hence Montara. It is also interesting to note that, the report indicated installation of the two secondary control barrier hence a lie. As a result, it is considered naïve to not explore other motive behind Montara, for example, sabotage.

In the conclusion part, Hayes (2013, 208) argues that internal self-regulation, which is primary the communiqué of the paper is essential for earning public trust. First, it is important to note that, public trust is closely related to social trust and these are mainly manifested through ‘visible’ acts by the company to the local community (Mannan, Chowdhury & Reyes-Valdes 2014). That said, being an offshore project with essentially no local community, trust can only be gained from the regulatory authorities and in this case, it is mainly from previous successfully completed projects (Hutter 2010; Klinke and Renn 2012; Johnson 2012). What the paper thus recommends as a new policy for safety management is basically an organizational competency advisory for organizations to become more competitive, minimize risks related costs, and build a brand name in the industry.

 

Conclusion

Offshore Safety Regulation is considered to be a based on a misleading background and foundation by arguing that the cause of Montara blowout was a failure of the regulatory framework, when it is evident that, it was basically as a failure of implementation of the regulatory framework in place. The paper recommends that because the risks and causes for accidents could be organizational related, then such should be controlled through; incorporation of organization issues into risk consideration, regulation of organizational issues, and demonstration of organizational safety cases and enforcement of self-regulation. However, these are considered to be simply recommendation for individual organizations on how to minimize or entirely prevent risks. Given Offshore Safety Regulation is aimed towards preventing another Montara occurrence, and bearing in mind the history of the cement shoes in US oil wells and the inconsistent reporting in the case of Montara interns of secondary control barriers, it is considered naïve to not explore other driving motives behind the incident, for example, sabotage. Offshore Safety Regulation is considered to be a suitable organizational competency advisory for organizations to become more competitive, minimize risks related costs, and build a brand name in the industry.

 

References

  1. Australian Government, (2011). FINAL GOVERNMENT RESPONSE TO THE REPORT OF THE MONTARA COMMISSION OF INQUIRY, Commonwealth of Australia.
  2. Hopkins A, (2012), Disastrous Decisions: The Human and Organisational Causes of the Gulf of Mexico Blowout. CCH: Sydney.
  3. Hutter BM, (2010), Anticipating Risks and Organizing Risk Regulation. Cambridge University Press: Cambridge.
  4. Jan Hayes. (2013). A New Policy Direction in Australian Offshore Safety Regulation. In: Preben Hempel Lindøe et al. (eds.)Risk Governance of Offshore Oil and Gas Operations. pp. 188-211. Cambridge: Cambridge University Press.
  5. Johnson C, (2012), The competency gap: The failure of regulation in workplace safety, Paper in the Proceedings of the 6th International Working on Safety Conference: Towards Safety through Advanced Solutions. CIOP: Warsaw.
  6. Kerin T, (2015). The evolution of process safety standards and legislation following landmark events – What have we learnt? 11th GCPS
  7. Klinke A, and Renn O, (2012), Adaptive and integrative governance on risk and uncertainty, Journal of Risk Research, 15 (3): 273–292.
  8. Lindøe P , Baram M, and Patterson JR, (2012), Risk regulation – an assessment of US, UK and Norwegian approaches. Paper presented at ESREL. Helsinki, Finland.
  9. Mannan MS, Chowdhury AS, & Reyes-Valdes OJ, (2014). A portrait of process safety: From its start to present day, Hydrocarbon Processing
  10. Rosa E, Renn O, and Mccright A, (2013), The Risk Society Revisited. Social Theory and Governance. Temple University Press: Philadelphia.
  11. Rosness R, Blakstad HC, Forseth U, Dahle IB, and Wiig S, (2012), Environmental Conditions for Safety Work – Theoretical Foundations, Safety Science, 50 (10): 1967–1976.
  12. Tharaldsen JE, Wiig S, Hanson BA, Ersdal G, Guldbrandsen T, Dybvig G, & Dahle IB, (2011). Major accidents and their consequences for risk regulation, Esrel Conference, France.

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