Safety and high-risk companies: Lessons learned after Odfjell
The Dutch Safety Board has identified a number of shortcomings in managing safety at high-risk companies. It involves about 400 so-called ‘Major Accidents Risks Decree’ companies in the Netherlands and the governmental supervision. Odfjell Terminals Rotterdam has done much to improve the safety and other parties in the sector have also adopted various measures. This provides a foundation, but there are more efforts needed to achieve the desired level of safety.
In a series of recommendations made at that time, the Dutch Safety Board indicated those areas that could be improved, in addition to measures by the parties themselves. In 2016 the Board decided to investigate what action the relevant parties had taken in response to the recommendations, and the extent to which the safety issues had indeed been addressed. This report is the result of this investigation.
All aspects of the ‘Odfjell case’ have had a major impact on the sector that is subject to the Major Accidents (Risks) Decree (Besluit risico’s zware ongevallen, Brzo). Both companies and supervisory authorities are aware of the severity of what occurred from a business and safety perspective. All relevant parties have taken steps to address safety deficiencies, including by following recommendations from the 2013 Odfjell report. This is no less than could be expected of them in view of the significant risks and the severity of the safety deficiencies. The efforts of the various parties involved have resulted in worthwhile improvements in safety management at companies to which the Major Accidents (Risks) Decree applies (hereinafter referred to as high-risk companies). However, the Dutch Safety Board has still identified a number of shortcomings.
Odfjell and the high-risk sector
Odfjell Terminals Rotterdam did not sit idle after the shutdown. Together with its parent company, OTR invested heavily in technical improvements to the tank storage facilities and fire-extinguishing facilities. This meant that it was possible to successively bring parts of the shut-down complex back into use over a period of years, under the watchful eye of the supervisory authorities responsible for supervision under the Major Accidents (Risks) Decree. The company management has also made many improvements at an organisational level, including increased safety supervision with direct reporting to management. Moreover, the company has addressed the safety culture in all sections of the organisation. Improvements are still being made at all levels - from top management to the shop floor - not only to the physical installations, but also the business processes and the safety culture.
The company would probably have been unable to restart its operations without the support of the international holding company, and considerable efforts will be required over the coming years to provide sustainable solutions to Odfjell’s safety deficiencies. The sense of urgency will inevitably subside over time. Vigilance is all the more necessary now that the company has decided to enter a subsequent change phase. After a period in which the focus was largely on improving safety, the coming period will see Odfjell Terminals Rotterdam seek the right balance between safety and service. Without compromising safety, Odfjell aims to strengthen its commercial position in the Port of Rotterdam once again by responding more effectively to market developments. The Dutch Safety Board considers it essential for the company to embed safety as a routine in both its primary process and management during this shift in strategy. The internal supervisors, including the board of supervisory directors, have the task of monitoring this process.
As a result of the Odfjell case, tank storage companies in the Netherlands are now more aware of their responsibility for safety. They have taken safety improvement initiatives at sector level, such as the Safety Maturity Tool (audit instrument), mutual safety benchmarks, and sharing best practices. Many tank storage companies have adopted these measures. However, the Dutch Safety Board finds it worrying that a significant proportion of the companies can still evade these developments. More generally, all high-risk companies must first and foremost have effective safety processes in place and must remain alert. Internal supervisors, such as boards of supervisory directors, are responsible for continuously and actively ensuring that the board of directors and management meet this requirement. In the period after the shutdown, Odfjell demonstrated that fulfilling this responsibility can pay off. The lesson from both this and the previous investigation is that internal supervision is essential at high-risk companies to ensure that a focus on safety is an integral part of business operations. The Dutch Safety Board feels that every high-risk company should draw up and implement quality requirements to guarantee nternal supervision of safety.
- Chemical industry (including Seveso companies)