SPE 128361

THE IMPLICATION OF POOR FUNDING ON HSE POLICY

IMPLEMENTATION IN THE NIGERIA OIL EXPLORATION INDUSTRY.

FAGBE TUBOSUN, MIIRSM, AMIMarEST. HSE ADVISOR UGNL/IDSL JV.

Introduction
Copyright 2009, Society of Petroleum Engineers Inc.

This paper was prepared for presentation at the 33rd Annual SPE International Health Safety and Environment Management is a
Technical Conference and Exhibition in Abuja, Nigeria, August 3-5, 2009.
critical aspect of Nigeria Oil exploration industry
This paper was selected for presentation by an SPE Program Committee following
review of information contained in an abstract submitted by the author(s). Contents
whose catalytic effect, particularly in the socio-
of the paper, as presented, have not been reviewed by the Society of Petroleum economic development cannot be over
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education sectors – that is not linked to the Oil and
Gas sector. In short proper management of
ABSTRACT. Health, Safety and Environment in the Oil and Gas
Sector will automatically improve mobility and
Employers crave for profit maximization with accessibility of passengers, goods and services.
lesser concern for personnel’s health, safety and
working environment is worrisome and has made Nigeria, incidentally, is endowed with vast reserve
implementation and management of HSE Policy of Oil and Gas deposit that spread across the
difficult for Professional Safety Personnel in the Niger-Delta region and with high prospect of
service of most Nigeria Oil and Gas Companies. In acquiring commercial quantity deposit in the Chad
the contemporary setting, expert advices on Basin. The potential of the yet to be tapped
sustainable Human Safety and well being in an Bitumen deposit in Ondo, Edo and Ogun axis as
appropriate workplace via provision of essential well as Liquefied National Gas has steadily
working tools and standard Personal Protective increase exploration activities in Nigeria.
Equipment for safe operation are strictly adhered Unfortunately, most employees in Nigeria have
to by the Company’s management. In Nigeria less concern for the working environment and
today, opposite seems to be the practice. This personnel safety. They only crave for profit
paper examines the impact of poor funding on maximization and indulge in capital flight.
HSE Policy implementation and enforcement
capability in a typical Nigeria Oil Service However, Health and Safety Practices in the
Company. It avows a high and unsteady Sector is experiencing great challenges in terms of
population influx and a disproportionate in demand funding and policy implementation.
for safety equipment, training and working Notwithstanding, this paper seek to assess the
materials budget for the phased Safety implication of poor funding on HSE Policy
development. This paper proffer solution to implementation in the Nigerian Oil exploration
stemming the HSE Policy poor implementation Sector by analyzing effects on overall performance
tide, which includes, appropriate planning, healthy of the sector.
budget, prompt release of fund and unbiased
management commitment to Personnel and
operational safety.
2 F. Tubosun SPE 128361

The need for effective HSE Policy and funding close interaction with the growth and pattern of
businesses across regions. HSE implementation
For any meaningful assessment of the and the Oil and Gas business management are
performance of management in the typically dependent. Furthermore, HSE effective
implementation of HSE Policy, it is important to implementation produces safe-place and safe
have a clear comprehension of what HSE Policy, persons which in turn, produces productivity,
in all its ramifications, intends to achieve. As higher returns on investment (ROI), workers’
suggested by HSG 65 (1998), Yeo (2007), commitment to duty, incident reduction,
Spickett and Brown (2006), Whitehead (2007), competency, improve services and optimum use
Dorrell (2009) and modified here. There are some of ManHours for meaningful production. It is now
underlying principles about workplace safety and well recognized that HSE effective management
personnel wellbeing that need to be well promotes cooperation, interaction, trade and
understood for the purpose of formulating effective commerce. It also provides employment.
HSE Policy as well as adequately managing the
implementation through funding. These include: From the foregoing, employers, in order to
optimize the existing and potential benefits of
- Safety is about protection of environment investing rightly in all HSE issues, should know
against pollution and environmental and not ignore their roles as investors; be well
hazards. informed about the fundamental impact of Health
- Health, Safety and Environment is about and Safety while running an organization as well
safe-place and safe-people. as have adequate knowledge on principles of
- Effective Safety practices should increase prevention of incidents.
efficiency, encourage healthy competition
and if possible foster ownership structure Requirement of Health and Safety
that would improve Oil and Gas Sector An attempt is made in this section to outline the
performance general requirement of Health and Safety as
- The role of Government is to set up applicable to Employer:
standard to guide development, by
establishing requisite legal and legislative 1. REASONABLE PRATICABLE: This
framework, in enforcing the standards. practicable requirement means that it
- It is the role of employer to prevent must be carried out only if limited by
incidents and accident in their workplace the current state and knowledge and
due to moral justification, legal and intervention, even though
financial implication. implementation may be difficult or
- The formulation of Policy, its inconvenient or costly.
implementation, funding and 2. REASONABLY PRACTICABLE
encouragement of employee on active which means a RISK-Benefit Trade off
participation are roles dedicated to the that is the reduction of risk and the
employers. benefits is minimal compared to the
- Health and Safety policy facilitate good cost.
relationship between communities and 3. ABSOLUTE DUTIES: They are
company. worded as SHALL, which indicates
that every employer shall ensure that
From the foregoing, one is not in doubt about the all persons who use work equipment
need to ensure that “HSE” as a concept is viewed have received adequate training.
holistically, and that “right HSE policies are applied
at the right time.” In other words, in order to Responsibilities of employer.
achieve higher efficiency and sustainability in the
oil and Gas Sector according to World Bank From the three general requirements of Health
(2002), we need careful planning, realistic and Safety, the following responsibilities were
implementation, efficient use of fund and better generated. These responsibilities are:
management. This therefore, implies that HSE - Introduction of measures that affects
policy need to be funded in other to support a Health and Safety.
better quality services on a sustained basis. - Appointing/nominating competent persons
and emergency procedures
Perhaps it should be mentioned that because - Planning and organization of Health and
Health Safety and Environment management has Safety training.
3 The implication of poor funding on HSE Policy implementation in the Nigera Oil Exploration Industry SPE 128361

- Managing Health and Safety is Singapore based maritime company that

consequences of the introduction of new engages in Diving activities, the sixth employer is
technology. from the educational sector. The choice of
- Funding of Health and Safety programs. companies and location were spread to enable the
- Information passage to stakeholders research have a result that can be applied in
- Consultation managing HSE across various fields.
- Provision of suitable personal protective
equipment to workers exposed to risk to - A, B and C are exploration companies
her health or safety while at work. operating within Nigeria
- Organize for Health and Safety to - D is Angola
maintain control, promote cooperation,
ensure communication and secure - E is Singapore base Driving Company
competence - F is a Nigerian Private University

How employers can prevent accidents in the Table1 below is the table showing the yearly
worklace budget allocation for the HSE section and the
actual percentage of fund release all expressed in
The two main approaches or target of Health and
percentage for the year 2007 and 2008.
Safety are safe place and safe person. The safe
place refers to environment, protective measures
for access/egress; plants and equipments/ Table1: Yearly Budget and Fund release in 2007
materials, system of work, supervision and training and 2008 expressed in percentage (%)
while safe person mean individual who has
received adequate information, training and Companies Budget Percentage (%)
instruction and who follows the safe system of /Employer Percentage Released for
work. (%) Fund for HSE
2007 2008 2007 2008
From the above two approach, employers are A 1 1 85 60
therefore responsible for ensuring safe place and B 1.6 1.4 60 53
safe person through the below principles. C 2.0 2.1 68 72
- Controlling hazard at source D 0 2.8 - 67
- Avoiding risks E - 8% - 92
- Adapting work to the individual F 0.10 0.18 90 88
- Evaluating unavoidable risks
Report from colleagues serving in the
- Adapting to technical process
aforementioned companies A to F indicates that,
- Replacing dangerous by less/more only Company E situated in South East Asia has
dangerous the budgetary allocation of 8% while others in
- Develop a coherent prevention policy Africa varies between 0.18% and 2.8% of the total
- Giving priority to collective protective sum of the Company’s budget for each respective
year. Moreover, the report also indicated that there
measures
is serious difficulty in the disbursement of the
- Provide appropriate training information approved sum for the year as none of the six
and supervision companies fully disbursed their allocation despite
- Provision of protection equipment pressure from the sectional Head for the fund.
- Funding of HSE Policy for proper
Poor training and development Program
implementation.
In recent years, issues of HSE personnel
Performance evaluation of roles of employers
competence through training and development
in funding HSE activities
program have attracted the interest of most
international clients in the selection of tenders and
In this session, attempt is made in appraising the
award of contracts to contractors. Unfortunately,
current state of performance of some employer in
training and development program for HSE
the Oil and Gas Sector. Six companies were used
employee in most Nigeria companies is fast
for this purpose; three of the companies are
eroding due to inadequate knowledge of most
currently operating in Nigeria, one in Angola, one
4 F. Tubosun SPE 128361

employer on training requirement of safety earmuffs, late or non replacement of hand gloves
professional to enable them perform their statutory and other PPE for employee use is so common
role of implementing Safety Regulations, which is among players and this portend bad image and
an International Practice that requires broad unsafe practices in the sector.
knowledge on various fields. There is no doubt about the fact that the
Five of the Companies which are A, B, C, D, and F aforementioned issues has affected the
falls within the category of company where poor implementation of HSE policy and have not
funding hindered its execution. Feedback from allowed it made the desired impact. Other effects
this five (5) companies indicated that there is of poor funding on HSE policy are:
seemingly poor administration of employee
training program through non involvement of ¾ Insufficient supply of stationary materials
external professional trainers for such assignment. for the printing of risk identification report
The research also reveals that HSE professionals form. Therefore has resulted in poor report
are not sponsored for competence examination
of identifiable risks.
due to unemployment rate and self development
effort of most practitioners.
¾ Later of laminating materials and
Waste management: Poor management of waste malfunctioned machines that hinders
was pronounced as one of the effect of poor production of plasticized procedures and
budgetary allocation. This was found to have other informative materials that usually
resulted in insufficient waste baskets, poor waste aids HSE information dissemination to the
handling, sub-standard training for waste employee.
handlers, inadequate sewage treatment and
analysis. The education sector despite running ¾ Shortfall in the erection or pasting of
biological science courses with modernized safety sign where necessary.
laboratories bothers not to treat sewage nor carry
out its analysis before disposal. Sewage analysis ¾ Delay in the implementation of corrective
in A, B, and C are most time delayed or not
actions that emanated from risk identified
properly executed due to non-payment of the
executing contractor for a long period. by stakeholders.

Environmental monitoring: The use of analogue ¾ Poor medical emergency management

meters for noise, illumination and other arising from insufficient medical team,
environmental parameter is worrisome despite operation hours, First Aid Kits
technology breakthrough and wide use of digital administrations and insufficient medical
meters worldwide. Readings obtained form this supply.
analogue equipment was found not to be reliable
due to aging and parallax errors. Factors responsible for poor funding of HSE
activities
Emergecy management:
The management of fire detection and fire fighting In view of the above issues, several factors were
equipment is also affected by poor funding, found to be responsible for poor funding of HSE
adequate fire fighting protective clothing was activities, some of this factors are reliance on
found to be lacking, breathing apparatus for foreign market for safety materials, sky rocketed
firemen not reliable due to expiration, smoke exchange rate, poor management of available
detectors and extinguishers not sufficient and not stocks in store, fraud, poor resource allocation,
adequately serviced as at when due thereby poor management skill on Health and Safety
making the environment unsafe. issues, Capital flight, less concern for workers well
being and workplace safety, lack of management
Personnel Protective Equipment (PPE): commitment as well as poor enforcement by the
Personnel Protective Equipment intended to be Regulatory Agency.
worn or held by “person” at work to protect him/her
against one or more risks to his/her health and Effects of poor funding on Oil and Gas
safety. Reports reveal that in Nigeria, the purpose business in Nigeria
of protective clothing is far from being achieved.
The use of worn out protective clothing, use of torn
shoes, broken or defective helmet, sub-standard
5 The implication of poor funding on HSE Policy implementation in the Nigera Oil Exploration Industry SPE 128361

The problem of funding of Health, Safety and investment through best HSE Policy formulation
Environment activities in the operation of Oil and and implementation as it is being demanded by
Gas business has its tolls on all stakeholders in most Clients. Investing in Safety the joint session
the sector. This covers the operative staff, of America Society of Safety Engineers (ASSE)
maintenance employee, cleaners, contractors and and Singapore Institute of Safety Officers (SISO)
visitors. declare makes good business sense and strong
safety culture lends itself to an improve business
The rather overwhelming problems have led to performance with capacity to save as much as 5%
other numerous challenges for the oil and gas of a company’s total profit that could have been
investment. One of these problems is accident, spent on occupational injuries. ASSE-SISO
which has resulted in direct cost; indirect cost; (2008). In his own contribution to safety
insured cost and uninsured cost in most management, Fearing (2008) noted that a return-
companies. on-investment (ROI) of $3USD or more is receive
on every $1 spend on improving workplace safety
Direct cost is cost that covers legal fee, and health program. The declaration that safety is
compensation, insurance, cost of replacing a value by companies and still struggling to make
machine and personnel. The indirect cost this declaration true Knisley(2008) observed has
comprise of cost incurred through loss time of led them to developing world class procedure,
employee work-hours, loss of time of management taking on series of behavior based program but
and supervisor during investigation. Indirect cost still experience injuries.
also includes loss order, corporate image problem,
downtime of machinery and cost of training. To ensure an all round success in the
Insured cost on its part is responsible for employer implementation of HSE policy taking into
liability, public/third party liability, contract all risks, consideration the aforementioned, it is necessary
plant and building damage including tools and for investors to note that the following and act on
equipment. The uninsured cost is cost expended them. These are:
on products and materials damages, emergency
supplies, product delay, overtime, temporary - Consideration of Health, Safety and
labour cost, investigation time and supervisor time Environment (HSE) management
diverted for investigation. generated expenses as a worthy
Other effect of poor funding are: investment.
- Work induced stress. - Investor should believe that for any
- Violence at work due to abuse, threat or amount spent on HSE implantation, A
assault minimum of thrice such amount will be
- Poor workstation design and condition. gained back directly or indirectly.
- Heat and radiation exposure with resultant - Funding of HSE activities improves the
effect company’s reputation.
- Noise - Adequate funding of HSE programs
- Poor welfare and lack of motivation. reduces operational incident, loss time to
- Poor education, training and development absenteeism and improves productivity.
program for the employee. - Financial provision for the implementation
- Lack of adequate competence of HSE policies sell company to her
- Consultation and communication prospective clients and enable her to
breakdown. secure the confidence of competent
- Business losses. employee.
- Delay in production - Funding of HSE policy will facilitate
effective communication and improves
- Loss of capital to occupational injuries
performance of employers on duties to
which was estimated to cost global
consult as mandated by ILO-C155, Article
business about US$171billion yearly.
20 and ILO-R164, Article 12.

Finally, it is of the research opinion that the

How management of HSE activities can be
following recommendation will be of great
improved through funding
importance for overcoming the challenges posed
by insufficient funding of HSE programs. These
So far all investors, private and Government are
recommendations are:
now clearly appreciating the need to develop their
6 F. Tubosun SPE 128361

- Compulsory Occupational Health and mica(P)092/07/2006. Singapore Institution of

Safety Management training program for Safety Officers, Singapore.
employers and management team
participation as being practiced in HSG65(1998) Successful Health and Safety
Singapore and United Kingdom. This the Management, Her Majesty’s Stationary Office,
research hope would enable the employer Norwich UK.
in acquiring the HSE management skills
as well as enable them to appreciate the Jack Fearing(2008) Selling Safety to
need for funding of safety program Management, ASSE-SISO Conference,
Singapore.
- Funding of Safety professional career
development schemes, this is achievable Jeffrey Spickett and Helen Brown (2006) The
by increasing the budgetary allocation of importance of Risk Management, Q3, mica(P)
Health, Safety and Environment section 092/07/2006, Singapore Institution of Safety
Officers, Singapore.
- Optimum enforcement of Safety
regulation by the regulatory agency with Jocelyn Dorell (Jan 2009) Hacrow’s Glasgow
appropriate sanctions the research rangers, Health and Safety at Work Headley
observed will be a magic wand for the Brothers Ltd, Kent UK.
improvement of occupational health and
safety activities funding. Roy Yeo(2007) Managing Safety starts with top
Management, Singapore Institute of Safety
Officers, Singapore.
Reference

Bruce Whitehead(2007) Why managers are the

weakest link-The Australian experience, Q1