Environmental and Safety Management Challenge Abroad

As companies become ever more global to expand into new sites and markets, they face expected as well as unexpected environmental and safety challenges. This is particularly true for the oil and gas industry which tends to operate in the world’s frontier locations. Yet environmental and safety requirements and regulations will become even tougher in the years to come as a result of pressures on the industry to reduce its environmental footprint and fatality and injury incident rates related to operations.

Battelle’s experience suggests that multinational corporations face an array of challenges in managing environmental and safety issues on a global scale. These challenges include the clash of cultural norms and expectations, stakeholder scrutiny of operations, expectations of sustainable business practices, and investor and shareholder pressures for improved performance. These pressures add growing complexity to operations that are often difficult to reconcile.

Adding to this mix of challenges, over the past six years companies have shed staff and lost core competencies in environmental and safety management, as a byproduct of responding to the increasing pressure to improve financial performance and profitability through cost cutting. This has already exposed operations at home, where in the U.S. fatal incidents in oil and gas industry reached a seven-year high in 2001 (Upstream, 28/3/03). The influx of lower wage, inexperienced laborers into the industry and the exodus of a majority of the experienced labor pool may have been a root cause. Operations integrity management systems and engineering solutions alone have been unable to stem this slide.

Abroad, this erosion of core competence within western companies is now making it doubly difficult, because in many countries there are a priori inferior environmental and safety standards and performance, coupled with lack of safety awareness, poor infrastructure and culturally based weaknesses in management control and supervision. The arrival of western companies and contractors imposing their systems onto existing structures has resulted in confusion. Hazards get overlooked and risks go unmanaged.

So, is there a way out of this dilemma? Battelle observations of performance improvements in West Africa and Russia suggest a critical element of any sustainable solution is local capacity building. In addition, through skillful training, local workforce attitudes and habits can be changed, introducing a new environment and safety culture into the work place. To be effective and lasting, this must be coupled with measures to enhance western company employees’ understanding of local conditions.

For additional information, contact Dr. Bernhard Metzger at (781) 895-4886, metzgerb@battelle.org.