Practical proposals for improving the Department of Labour’s approach to high hazard industries
Recommendation three: Strengthen relationships
General observations
The Department's approach to high hazard industries has been reasonably introspective with not a lot of information sharing, collaboration or cooperation between the Department and other regulators and even operators.
It appears the Department's specialist operational people (the mines inspectors and the petroleum senior advisers) have a solid interaction with local operators particularly at a field level (i.e. those in charge of places of work). The inspectors and senior adviser(s) also routinely attend overseas conferences and have a healthy level of engagement with overseas regulators and standard setting bodies.
What is less clear, though, is the Department's more senior engagement on strategic/collaborative and information sharing arrangements with other agencies and operators. As a regulator, it is important for the Department to ensure its work is well coordinated and 'joined-up' with other regulators. It is an unnecessary burden on business to have to deal with a parade of regulators where it is possible to deliver a more coordinated contact. It is also important that where the Department might have information that can help other regulators, it is in the interest of a whole-of-government approach to ensure such information is made available where appropriate and able.
By leaving the primary relationships to the front-line, the Department's interaction with others has taken on a functional, operational aspect. To maximise its effectiveness, it needs to lift these relationships to a more strategic and coordinated level while maintaining the excellent front-line relationships already established thanks to the efforts of the mining inspectors and petroleum specialist. In short, the Department's front-line staff need to continue to maintain excellent local, operational relationships with operators and other local regulators. However, the Department's head office must also play a more active role in forging and maintaining effective relationships with industry, regulators, environmental agencies and international bodies.
Strengthen the relationship with third party inspection bodies
General findings
Inspection bodies primarily have a relationship with petroleum operators. This is understandable given it is up to each petroleum operator to obtain a Certificate of Fitness from a recognised inspection body. Because of this (the primary relationship between operators and third parties), the Department has allowed itself to become detached from third party inspection bodies. This is unfortunate given inspection bodies have a wealth of information about safety technology practices, best practice models and technical and operational insights.
Inspection bodies are experienced and highly knowledgeable 'eyes and ears' the Department does not otherwise have in this industry. Being able to build a relationship with these bodies and allow them to help the Department improve its work and identify and review possible new standards/practices necessary to lift performance will be beneficial.
Inspection bodies are not part of the Department. The Department cannot co-opt inspection bodies as part of a wider enforcement approach, for example. However, it is entirely reasonable for the Department to work with inspection bodies to share information and to focus on the development of technical understanding of the industry. Inspection bodies might also benefit from interacting with each other through a good relationship with the Department (e.g. raising alerts) and may benefit from a stronger relationship with the Department to obtain useful information about industry and regulatory changes.
The Department should also invite other regulators and interested parties (such as MfE) to participate in regular meetings with inspection bodies. This will provide a useful means for agencies such as MfE to be able to make enquiries about the state or quality of equipment and systems on particular platforms from knowledgeable and experienced people.
Actions
49. The Department should facilitate a regular meeting with inspection bodies to discuss standards, emerging issues and industry developments (this kind of collaboration is already occurring in some areas - PEPCR for example - the Department could possibly expand on these existing initiatives). Invitations should also be extended to other agencies and regulators. [NSM]
Strengthen the relationship with employee representatives and health and safety representatives
General findings
Health and Safety Representatives and Chairs of health and safety committees (or their equivalent) represent an excellent inside view on an operator's approach to health and safety and the level of awareness and safety culture present in the workplace. For this reason engaging with employee representatives like health and safety representatives offers an important opportunity for gleaning real world information about the actual level of safety awareness and concerns from front line staff.
Actions
50. Inspectors should engage with health and safety representatives when they visit a site. [HHT]
51. At least once a year at each high hazard place of work, inspectors should engage with the health and safety representatives or Chairs of the Safety Committee or representative of whatever other employee participation scheme is in place at the workplace-without management present. [HHT]
52. Because of the importance of employee participation as a means of promoting a strong safety culture in a workplace, the high hazard team should actively promote the need for employee participation in any smaller high hazard workplace where employees have not taken up the opportunity to be involved. [HHT]
Strengthen the relationship with NOPSA
General findings
The Department has a particularly strong relationship with the Australian offshore petroleum regulator, NOPSA. This relationship has been maintained at both a strategic/managerial level as well as at an operational level.
Unlike the Department of Labour, NOPSA exclusively focuses on offshore petroleum and is funded through industry levies. As such, NOPSA's operation is larger and considerably more sophisticated than the Department's work with the offshore petroleum industry.
NOPSA has indicated its willingness to support the Department of Labour to the fullest of its ability. However, its ability to support the Department may be constrained by statutory limitations on NOPSA's ability to use its resources outside of Australia and to recover funding from non-industry sources. NOPSA's leadership has confirmed that it would support a formal approach being made from the New Zealand Government petitioning the support of the Federal Government to remove the legislative barriers preventing NOPSA from assisting New Zealand's regulatory efforts.
Ministers have discussed the idea of using NOPSA and are keen to receive a letter that can be sent to their colleagues in the Australian Government to initiate the process of enabling NOPSA to work with the Department.
Aside from the opportunity to use NOPSA, the Department should maintain an active relationship with NOPSA and specific ideas include:
- Sharing systems and methodologies - NOPSA has sophisticated information management and decision-making systems. The Department does not have any bespoke systems for dealing with either the petroleum industry, or high hazard industries more generally. For example:
- NOPSA's use of the TapRoot methodology for problem solving
- Incident and document management information management systems.
- Using NOPSA to review safety cases - Australia requires safety cases from offshore petroleum operations. Because of the size of the Australian industry, NOPSA has to process a large number of safety cases. As a regulator, NOPSA therefore has a lot of standing capacity for processing and analysing safety cases. It is only reasonable to expect that NOPSA will charge the Department for this role.
- Obtaining NOPSA's advice (and support) on improving the guidance and systems supporting safety case development - aside from the role of reviewing safety cases, NOPSA can also help the Department improve the information and support provided to New Zealand operators to develop quality safety cases. This could include enabling New Zealand operators being able to access Australia's operators. It should be noted that the Department already shares NOPSA safety alert information with operators as a matter of course. The Department should continue to broker NOPSA material to operators and should look to expand it to cover other guidance material and useful information.
- Sharing incident and operator information - both the Department and NOPSA collect a wealth of information on incidents, accidents and other performance issues with operators. Sharing this information could be useful. Some of the operators working in New Zealand have similar operations or may actually have previously operated in Australia. As such, accessing information about recent issues would be informative. Also, sharing information will help identify emerging issues.
- Seeking NOPSA feedback on the safety record of any operator (and or comments on proposed technology etc) to be fed into the licensing stage. MED is looking for more up-front information about the safety record of operators when considering prospecting, exploration or extraction applications. The Department could invite NOPSA to provide commentary on the Australian experience of the operators and or the technology or approach being proposed. The Department could pass this information on to MED along with any information or views it may have.
- Cooperating with NOPSA to develop trans-Tasman performance indicators - New Zealand should be promoting and supporting the development of international indicators (through the IRF, for example). However, it would be useful to work with NOPSA to develop trans-Tasman indicators and identify levels of comparability.
- Investigate the possibility of NOPSA inspectors being used to help conduct assessments and investigations - under the HSE Act, inspectors can 'be accompanied and assisted by any other people'. This means, that as long as a New Zealand HSE inspector leads an assessment, they may be assisted by a NOPSA inspector. There will be important legal issues to deal with. For example, the NOPSA inspector will need to genuinely assist the HSE inspector and not effectively lead the work. The NOPSA inspectors could be flown across to New Zealand on an 'as required' basis. The Department would need additional funding for this. This kind of arrangement would be useful for technically-complex investigations as well as comprehensive 'top-to-bottom' workplace assessments.
- Seconding NOPSA staff to the Department as inspectors and advisers (and vice versa). Another option for involving NOPSA staff to bolster the Department's work with the local industry would be to second NOPSA staff as HSE inspectors or advisers. If the Department expects NOPSA staff to operate as inspectors within New Zealand, then they will need to meet the competency requirements required for warranting (e.g. sit the exams). Secondments could be for defined periods such as three or six months. The Department would need funding to support the secondments.
- Invite NOPSA to help review the Department's systems and processes. As the Department steps up its work with high hazard industries, it will need to have effective systems and processes. As a sophisticated operator, NOPSA could play a useful role in helping identify gaps in the Department's systems and provide advice and expertise on how to address those gaps.
- Allowing New Zealand inspectorate staff to access NOPSA training and to observe workplace visits/assessments - this is already happening. NOPSA kindly includes our Senior Adviser in on-site visits and opens training exercises.
- Working with NOPSA to identify useful guidance, codes of practice or standards that can be adapted and adopted by New Zealand - this could be the start of greater harmonisation between Australia and New Zealand.
- Inviting NOPSA to participate in any review of New Zealand's petroleum regulatory framework with a particular emphasis on trans-Tasman harmonisation (to the extent possible).
- Drawing on NOPSA's technical expertise and industry contacts for specialised skills - NOPSA maintains a level of technical and industry expertise that would be useful to supplement the Department.
Actions
53. Draft a letter for the Ministers of Energy and Labour that outlines the specific proposals for using NOPSA to help the Department of Labour to work with the local industry [NSM/Policy]
54. Arrange officials meetings between the Department and NOPSA to work through the specific requirements and identify whether any activities can be taken without regulatory changes [Policy]
55. Develop a draft contract with a detailed schedule of proposed work, performance criteria and costs [Policy]
56. Based on feedback from NOPSA, the Department will need to develop a detailed business case for additional funding to support compensating NOPSA for activities [NSM and Policy]
Strengthen the relationship with operators
General findings
The Department has developed very strong operational relationships with high hazard operators. The Mines Inspectors and the Senior Advisor petroleum all have good working relationships with local management. However the Department needs to strengthen its interaction with the managers and owners of the operations.
Actions
57. The Wellington-based Senior Advisers in the High Hazards Unit need to engage in a structured way with the high hazard operators. The Department's engagement team also need to be involved in developing engagement strategies. [NSM]
58. The Department should also build strong relationships with the senior leadership of high hazard enterprises. At least once a year, the Department's high hazard team should convene a meeting of operators to meet with regulators and each other. This annual conference can develop its own work programme of initiatives to strengthen safety culture and standards for the industry. [HHT]
Strengthen the relationship with MED
General findings
The Ministry of Economic Development (MED) is primarily responsible for the licensing of exploration and extraction activities relating to petroleum, coal and minerals. There is limited coordination between MED's licensing and the Department's inspection work. There is ad hoc contact often arising out of specific advice.
The licensing arm of MED and the high hazards team should form a close working relationship through regular, structured meetings and should explore the possibility of some sort of MOU setting out expectations of mutual support.
Some areas where structured, regularised contact between the two agencies would be useful are:
- MED providing the Department with details of license applications for drilling/digging
- The Department providing MED any relevant advice or insight into the safety record of applicants during the application phase (subject to legal clarification about what can be provided and how) and prior to approval
- Any concerns about licensees behaviour (e.g. identified issues with regulatory compliance)
- MED and Crown Minerals already receive daily drilling records. These agencies may also be interested in receiving all drilling and other notification reports as well as access to plans, safety cases and the wealth of information that the Department has access to. Using this information, MED and Crown Minerals can use it to ensure they are broadly consistent with license conditions - so sharing this kind of data may well be useful intelligence
- MED also regularly attends overseas conferences and seminars on mining and petroleum safety. It would be useful for MED and the Department to share any useful information and learning from these kinds of events.
Actions
59. The High Hazards Unit should, as a priority, draft terms of reference for a regular, formal meeting with MED [NSM]
60. MED should be invited to consider developing a protocol or MOU establishing parameters and expectations for information exchanges [NSM]
Strengthen the relationship with Maritime New Zealand
General findings
Maritime New Zealand (MNZ) is an important health and safety regulator in relation to offshore petroleum. MNZ is responsible for enforcing health and safety on all ships, which includes when they are not anchored, mobile offshore drilling units (MODUs) and ships used as floating storage and production offloading (FPSOs). MNZ also has certain legal obligations in terms of managing spills into the ocean.
Because of this relationship and the interfaces between the Department and MNZ, both agencies need to work closely together to ensure:
- each agency has a clear understanding of the extent of each other's roles and responsibilities and that there is no gap between the two agencies
- relevant information is shared between the two agencies (e.g. issues relating to MODUs and FPSOs should be passed to MNZ for future reference)
- MNZ expertise is used to help the Department determine the safety of MODUs and FPSOs
- The Department seeks MNZ's comments on safety cases for MODUs or FPSOs and on well-design/construction particularly in terms of the management of spills
- MNZ is invited to provide advice and direction on any relevant shipping standards or rules that may useful and applicable to MODUs or FPSOs
- the Department keeps MNZ up to date of any reported issues and also makes available all relevant reports including daily drilling records and Regulation 19 notifications. It could also include near miss notifications and other issues.
The current MOU could be used as a platform for setting out some clear agreements and expectations.
A specific issue relating to the containment of spills has arisen where there is uncertainty about the agency that should authorise containment plans. The Department's Policy Group has made good progress in resolving this with MNZ. However, it illustrates the potential for confusion about the relative roles of each party. This is likely to be further complicated as additional regulatory agencies, such as the Environmental Protection Authority, become more involved in offshore petroleum drilling.
Actions
61. MNZ and the Department meet to identify all of the potential issues [NSM]
62. MNZ and the Department agree a work plan to resolve any identified issues [NSM]
63. The Department should involve MNZ in the development of its High Hazard work programme to ensure MNZ input into the plan is scheduled and where opportunities for joint or coordinated assessment/inspections can occur [NSM]
64. The Department should provide MNZ with the opportunity to receive routinely information such as daily drilling reports and continue to provide notifications of containment failures and any other relevant information [NSM]
65. The Department and MNZ should, as a matter of priority, resolve the issue about containment [NSM]
Enable other regulators to access our data/information holdings
General findings
As regulator, we have a lot of insight into what is happening in the high hazard industries. If enterprises are complying fully with the regulations then the Department can expect to receive detailed plans and safety cases which can provide valuable insight into the proposed operations and how they manage safety critical hazards.
The Department also receives a regular flow of information through the serious harm notifications, notifiable events and drilling reports. This kind of information provides a valuable insight into the actual operations. This kind of information is useful to other regulators. However currently there is little, if any, proactive sharing of this information (in fact, this information is not really even readily available within the Department).
A priority should be to make all information collected available to other regulators and interested agencies such as the Ministry of Economic Development, Ministry for the Environment, Maritime New Zealand and the Environmental Protection Authority. Because of the potential sensitivity of some the information, strict security controls will need to be put in place. However, aside from having a secure interface, the general principle should be that the information is openly available to other regulators and government agencies.
Actions
66. As a priority, the Manager Technical Support Services and Business Support Manager should jointly investigate options for making the information immediately and securely available to other regulators. This immediate solution is likely to be an interim measure with little functionality (e.g. an index of PDFs and scanned information). [MTS and BSM]
67. The High Hazards team should, as a priority, move to develop a more sophisticated system that makes the information and data more accessible and able to be analysed and manipulated. [HHT]
Maintain international contacts - but lift them to a strategic level while also maintaining operational contact
General findings
The Department supports it work with the petroleum industry by continuing to be a member of the International Regulators' Forum and maintaining a strong relationship with Australia's NOPSA. The Mining Inspectors and the Senior Advisers High Hazards have attended overseas conferences and visited other jurisdictions. The Department also maintains other ad hoc interactions with international regulators and industry fora.
The Department needs to continue these relationships. However, in addition to this existing operational contact, the Department also needs to strengthen the strategic level. This means senior Labour Group officials need to play a more active role in attending international conferences and building relationships with other regulators. The emphasis of this strategic contact should be on exploring opportunities for information and support of the Department's work with high hazard industries and pushing international collaboration and benchmarking.
However, the operational contact also must be maintained between the Department's inspectors/senior advisers and other jurisdictions. This ought not be an either or arrangement. Where possible, strategic objectives should be pursued, but operational information is also very important.
Actions
68. The National Support Manager should be the Department's main contact for the International Regulators' Forum. [NSM]
69. Operational information flowing from overseas jurisdictions and requests for information should be directed to operational staff. [NSM]
70. A key focus for international contact over the next 12- to 18-months ought to be on:
(a) information exchange arrangements
(b) benchmarking opportunities
(c) standards and guidance to improve H&S practices
(d) opportunities for international harmonisation. [NSM]
