“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
– Upton Sinclair
I’m going to say some things that will raise some hackles, especially among those folks who make their bread and butter performing audits on workplace health and safety programs, or helping contractors navigate the various Safety Registries that exist. In short, your industry is about to change, and in a big way, thanks to blockchain technology.
First, I’m going to take you on a journey to highlight how contractors and their clients are wasting value on due diligence platforms that are of marginal utility at best. I will then outline how this issue will soon be transformed by blockchain technology.
Killing Trees, Saving Lives
In the past (and very much still the present), many safety programs ran on paper. Every inspection, Hazard ID, Safety Meeting and signature of a safety form can be thought of as a transaction. More on that later.
For example, one drilling contractor I consulted for had up to 64 separate forms for workers to fill out, each required in some way by the HSE management system they were trying to maintain to please various clients.
Compare that with the 13 forms they actually needed to make their rigs run, and it’s evident that HSE management systems were suffering from documentation bloat.
As one Driller said to me “If we had to fill out all these safety forms, that would take away time from filling out our operations forms for mud weight, drill line wear and tear (Slip n cuts), weight indicator calibration, pipe tallies and tour sheets – these are the forms that save lives. Your safety forms just eat up man hours”.
When you consider the labour hours embedded in filling out these 64 forms over the course of drilling one well, it became apparent that documentation bloat had gobbled up so many man hours that the record-able incident frequency, by definition, came down.
Because if everyone is too busy pushing paper, nobody gets hurt. And we wonder why people pencil-whip their JSAs and safety meetings.
Due Diligence or Fraud Enablement?
By “documentation bloat”, I refer to the ever growing expansion of health and safety management systems to meet that various requirements of different clients, each operating a different contractor management platform. or Safety Registry.
I’m not going to name names, but you know the ones I’m referring to. You’ll see them advertised at the bottom of almost every contractor’s website along with the statement “We are compliant with X, Y and Z safety registries”. It’s a way to signal to potential clients that they’ve already jumped through a significant amount of vetting hoops and that their program has been reviewed by an independent third party.
For those not in the know, a safety registry is a third party vendor who acts on behalf of the owning client (Big Oil Company A). The Safety Registry will collect various documents from contractors seeking to do work for Big Oil Company A. Documents such as insurances, WCB clearances, health and safety policies, job procedures and the like are compared against Big Oil Company A’s standards.
In this example, let’s say Big Oil Company A has a peculiar standard for a Ladder Inspection Policy and daily ladder inspection forms filled out by all contractors working for it.
Here’s where fraud enablement comes into play. Facing various pressures and constraints, watch how the safety registry creates a problem where previously there was none…
The folks in the contractor’s sales team inform the Safety Manager that they are ready to pre-qualify for Oil Company A, and that he needs to upload documentation to the Safety Registry for third party vetting. As he pays the subscription fee and reviews the safety requirements, he sees that Oil Company A requires a Ladder Inspection regime.
The safety manager finds himself in a scramble as he seeks to find a ladder inspection form from his friends at other contractors in the industry. A buddy of his sends over a ladder inspection form they used, he changes the header, fills it out the form, back dates a few items, and submits it as evidence that his company does indeed have a ladder inspection process.
The Safety Registry inspects it, and concludes that yes, the contractor does indeed meet the rigorous ladder inspection criteria, and so the contract is awarded. A bit fraudulent? Of course. But it’s happening. It’s a normalization of deviance.
Safety Registries, or…. Racketeering?
One problem is, the system is funded by the contractors. The contractors, in turn, eat the cost because it’s minuscule in light of the potential value of working for Big Oil Company A.
But the cost is not insignificant. Sign up fees can be anywhere from $1,500 to $10,000 annually, depending on the size of the contractor. Hidden costs begin to multiply when you consider that the system now requires someone internally to help run and maintain the documentation so that the contractor doesn’t run afoul of any future requirements imposed by their client.
The problem comes to a head as soon as that same contractor wins a smaller contract value with a different oil company, who we’ll call Oil Company B. And guess what? Oil Company B happens to use a different Safety Registry B.
One drilling contractor I worked with actually had this happen to them. The mine they worked at was bought out by another oil company using a different safety registry. The contractor was national, but their drilling operations were all done out of an Alberta-based location.
When they went to sign up for Safety Registry B, they stated that they had 50 employees in their Alberta operations, so their sign up fee should be the minimum ($1,800). The Safety Registry looked them up on Dunn & Bradstreet, and said “It appears as though you’re a national company with 300 employees across Canada, so that’s going to be $10,000 in annual fees”.
The contractor ended up biting the bullet. The Safety Registry didn’t budge on their insistence that the Alberta business unit was no different from the national brand. The Contractor would never pre-qualify for another client through that Registry – this was a one trick pony. Poof – $10,000 gone from the HSE Manager’s budget that could have gone to other, measurable risk reductions.
A little back and forth happened as the Contractor’s management team figured out they’d already spent money on an Alberta COR certificate, an ISO certification and a subscription to Safety Registry A, coupled with part time admin costs to feed data into these systems. Management said “But we already qualified for that other oil company on that other safety registry, and now we have to fork out another $10,000 to feed data into Safety Registry B!!!???”.
Wait, it gets better.
In order to satisfy Oil Company B’s contractor pre-qualification process, the contractor had to demonstrate that they had the following: 1) a random alcohol and drug testing regime, 2) a thorough preventative maintenance policy, 3) in vehicle monitoring systems and 4) all vehicles equipped with torque wrenches so that vehicle lug nuts can be checked every 100 kilometers and documented on a lug nut inspection form.
If the contractor didn’t have this in place, the client expected them document the gap and show progress towards meeting it over the lifecycle of the contract.
But here’s the challenge: The contractor wants some degree of consistency in its policies, and will be inclined to roll these policies out across their entire fleet.
Personally, I’ve seen one drilling contractor’s Health and Safety Manual absolutely explode from 110 pages to 700 pages, all because they are trying to comply with the various policies imposed by multiple clients running multiple registries.
On and on it goes for the contractor. In order to win contracts and pre-qualify, they incur the following:
This raises an important question: does any of this appreciably reduce risk, or does it simply force contractors to allocate resources towards issues their clients deem appropriate?
If the contractor is spending money to roll out ladder inspections, torque wrenches and fleet tracking systems to please all their clients, that leaves less money in the budget for what matters to the contractor. Maybe they need new fall protection gear, or to invest in some training.
Marginal vs Cumulative Effects
Safety Registries survive because of marginal effects, and die due to cumulative effects.
At the margin, a contractor will bite the bullet and submit their data to yet another Safety Registry, because the benefit/costs are apparent: Pay the fee, submit the data, win the contract. It’s a short term pain for long term gain. Actually, it’s the opposite.
Cumulatively, though, this duplication of effort raises long-term costs for the contractor, because it takes additional expenditures to sustain these registries for multiple clients. Budgets and resources are diverted away from other purposes, presenting a clear opportunity cost. Next thing you know, the company is skimping on fall protection because of the expenditures they are devoting to maintain the Safety Registry.
As soon as work is done for that client, or the contractor doesn’t think the client has future work for them, they will begin to assess the cumulative impact of maintaining their presence on that safety registry.
The Blockchain Solution
In order to wrap your head around this, you’ll have to read up on blockchain technology. I suggest this website:
All you really need to know, however, is that a blockchain is a ledger of transactions that are recorded across multiple points. The blockchain solves an issue of trust insofar as it brings transparency. The minute a transaction occurs, it is broadcasted to the network, recorded in the blockchain by other network nodes, and recorded for all eternity.
Now, consider how Safety Registries solve an issue of trust. The Buyer (Oil Company or Client) is forcing the contractor to eat the transaction cost for a third party (Safety Registry) to perform some validation on elements of the contractor’s safety program (ledger). If the Safety Registry is satisfied that the contractor’s ledger is more or less sound, they issue a green code for compliance and a red code for non-compliance or corrective action.
All this data collection and verification by multiple parties will vanish with the right blockchain technology. The cumulative value that is being poured into Safety Registries will be diverted towards either lowering costs (and hence price), or to reducing risk. It will free up a massive amount of capital for training, PPE and engineered solutions for improving the physical safety of the workforce.
The implications for people in the world of auditing HSE management systems are tremendous. While the digitalization of HSE systems is still in its infancy, we aren’t far off from every Hazard ID, Safety Meeting and safety form becoming a real-time data point in a digital system, as opposed to an archival document for future audit.
As more and more companies lower their HSE management costs by going digital, the issue of trust will come up as soon as someone hacks a database to alter their records for an upcoming audit. Auditors will need to be able to audit databases rather than piles of paper, a skill not many Safety Consultants have.
Blockchain technology, however, will solve these problems. Remember that HSE manager who faked his Ladder Inspection program? Sorry buddy, that form entered the blockchain after Oil Company A requested it.
Remember all those auditors you used to have to hire every three years to maintain your Alberta COR, ISO, OHSAS and Alberta Transportation certificates? They’re on the unemployment lines, because the blockchain self-audits.
Remember how you used to think you’d have to comply with every client’s policies, all the time across the fleet? Take a breather, contractors, the blockchain shows that all your rigs who work for Company A are in compliance with Company A’s policies.
In a future where blockchain technology solves the issue of trust, what good are the safety registries?
If you don’t believe me now, you will later.
Author: Aaron Braaten, President, Xi Safety
Email me at abraaten [ a t ] xisafety [ d o t ] com
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Film and TV production companies are becoming much more aware of their responsibilities under the provincial Occupational Health Act, Regulations and Guidelines. From exposure issues of personnel to the elements to journey management of film crews, the film and tv production industry takes itself seriously:
Some recent film work being done in Alberta:
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Recently we were asked about providing services for an event to be held in the community. Event Safety Management is just as important as any project safety management plan and even more so, because in addition to having to consider and plan around the actual event performers, you also have to factor in public safety as well.
We like to think that risk management can go one step further to actually be risk prevention planning. At Xi Safety we believe that event safety management is simply more than putting a few people in security uniforms and possibly adding in a requirement of first aid.
Many of us have seen in the media actual live footage of outdoor fairs or concerts where disaster has struck, whether its been a stage collapse, rigging failures, severe weather or other factors that can affect for example, movie productions or outdoor venues.
But to stage a successful event, it all has to start with a well thought out and documented Event Safety Management Plan. At Xi Safety Inc we’ve developed an excellent blue print that takes into account how local OHS Acts, Regulations, and assorted codes not only provide the frame work for events to be safely staged, but also that much needed road map that takes us through the 30 plus special considerations that are required to go into successful event planning to allow events to be staged without incident. If your organization or company requires professional event safety management, including film and commercial productions, concerts and other large scale events, Xi Safety Inc and Event Safety Management come together seamlessly with your idea and our expertise. From Event Safety planning to your medical, security, health and safety needs at your facility, Xi Safety Inc has you covered.
I want to tell you a true pipelining story about old Bill Daniels and Scruffy Smith, The Blind Safety Guy and his Two Legged, Seeing-Eye Dog, Precious. It’s a Story about teamwork, dedication and communication.
Now old Bill came up to Canada as a young engineer to work for Bechtel building the Trans Mountain Pipeline Project in ’52, Bill hailed from Oklahoma and had 6 other brothers and sisters who all had PHD’s in various disciplines, so one could say smarts truly ran in their family genes. After seeing considerable pain, suffering and loss of life on that Project, old Bill decided he wanted to get into the safety side of engineering to see if he could make a difference…..Some folks reckon he had two strikes against him already, one being an engineer and two, a safety man, so he bought a dog to have a friend. Back in the 90’s I was fortunate enough to go to work for Bill, he became my mentor, a man who forgot more than most of us ever will know and I was able to work on some of the largest mega projects in Canada and one overseas. But I digress, and here is the rest of the story
There once was this fellow who was an experienced Safety Guy, Scruffy Smith and over the years he went totally blind from macular degeneration and could no longer perform his regular inspection duties. Not wanting to give up the career he loved, he contacted the National Institute for the Blind and inquired about a seeing-eye dog.
The Administrator told him that they were out of dogs, save one old black lab, Precious who had lost his rear legs in a car accident, but was still capable of seeing an ant at a considerable distance. Old Scruffy, the safety guy immediately felt an instant attachment to the old lab and took him home
After months of training, the two rapidly developed a close bond and were a great team. Scruffy had trained the dog to understand some simple voice commands and the two could communicate flawlessly. With help from friends he got back to his former employer.
After talking to the company they agreed to see him and the dog and see if all of this could work out. Being a fairly progressive firm they rounded up the job stewards to see what they could do to help. The mechanics supplied an axle and wheels, the pipe engineers and survey designed the cart, the bending crew bent the pipe into a frame, the tie in/lowering in guys aligned all the pieces together and the pipe gang drew straws to see who was going to weld it all together, Xray and Quality boys ensured the unit would hold together on the rough terrain, the sandblaster took the finish to bare metal and the coaters coated and painted it all, the ditch and grade crew made sure there were clear paths so Scruffy and Precious could get around on the Spread, and stringing built ramped skid piles so the two could get up on them and view areas on the Right of Way, the pipe haulers got involved and moved Scruffy’s unit to the next spot he wanted to inspect, the carpenters/laborers fashioned a lightweight brace from some tubing, and made a padded harness, the electricians built a small flashing beacon. Even the test crew got in on the act and built a plug, cause the old dog had bad gas. Even management got involved and had a set of boots and a pair of doggles made up. The dog had a uncanny knack of noticing job site hazards and would bark once when he saw something. Scruffy, the Blind Safety Guy would rattle off a list of voice commands and when they matched the infraction, the dog would bark three times.
One day, they were out walking the spread, Precious leading Scruffy who was holding the reins and the dog barked incessantly. “What is it Scruffy?”, Blind Safety Guy asked. The dog was barking frantically now. The Blind Safety Guy rattled off a list of commands, and Precious barked three times at the “Fall Protection Signal” Scruffy, the Blind Safety signaled again “is he wearing any?” and Precious barked three times to signal YES!
Scruffy, The Blind Safety Guy signaled, “Is he tied off/” Precious, the two legged seeing eyed dog barked twice to indicate NO!
“Did he fall?’ Scruffy, the Blind Safety Guy signaled. Precious, the two legged seeing eye dog barked three times, indicating YES!
“Oh my” thought Scruffy, the Blind Safety Guy as he reached for his radio button to call the foreman who asked how his man was doing.
Scruffy, the Blind Safety Guy again signaled to Precious, “how is he?”
Precious, the two legged seeing eye dog barked……..Ruff.
The moral to the story? No matter what challenges and obstacles we are faced with on this project, a collaborative approach to safety, teamwork and clear communications will help us overcome all of them.
Remember your co-worker….we won’t walk by, we won’t wait until it is too late.