The European Process Safety Centre (EPSC) published Making the case for leading indicators in process safety on the selection, development, and implementation of leading indicators for process safety. The document contains details on the type and spread of indicators which EPSC members have established within their own companies.
In addition, EPSC provided several practical tips for the dos and don’ts of successful implementation including presentation of data and engagement of staff. This article is to develop these aspects further while exploring the relationship between leading indicators on a plant, business unit, and corporate level. Additionally, the interaction between leading and lagging indicators is to be highlighted alongside the management space which process safety indicators now inhabit with respect to monitoring and audit/review activities.
INTRODUCTION
For several years, organizations involved in high hazards operations have reported their process safety performance in terms of lagging indicators or “after the fact” measures such as loss of containment. These measures are naturally important to the company, the industry, and the wider public. Nevertheless, major hazards businesses are increasingly dissatisfied with basing their future strategy entirely on lagging indicators. This has been likened to driving a car using the rear-view mirror and can result in equally disastrous consequences. From a control perspective, feed forward as well as feedback control is desirable.
In other words, while learning lessons from past incidents, of both actual and potential impact, is vital, the major hazards sector would be unwise to wait for such events to initiate improvement actions. What are needed are indicators that proactively drive improvement. Leading indicators for process safety offer a way of examining the contributing factors to accidents and putting in place a system for monitoring these factors in a tangible process. In this manner, early warning signals can be acted upon and the progress toward zero accidents can be assured in a meaningful way.
EUROPEAN CONTEXT
Following the environmental accident in Seveso in 1976, the European Union adopted the first Seveso Directive in 1982. Following several other major chemical accidents, including Bhopal and the Sandoz Warehouse fire, the original directive was amended and, finally, at the end of 1996, the so-called Seveso II directive was adopted. Several further notable accidents then occurred, and the directive was further extended in 2003. Whereas the original Seveso directive focused on technical measures for controlling hazards, the modified Seveso II Directive focuses more on the management systems needed to ensure the technical measures are in place. In July 2012, the European Union adopted the Seveso III directive which includes explicit reference to safety performance indicators under those issues to be addressed by the safety management system of a Seveso operator. Member States must transpose the Directive by 31 May 2015. The developments just described show that over time Europe has developed a legislative environment for high hazard industries in which technical as well as management system aspects are being addressed. Collecting data on performance is part of this.
The Major Accident Reporting System was established to handle the information on “major accidents” submitted by Member States of the European Union in the framework of the Seveso Directives. The criteria for a “major accident” include damage to the environment, disruption of public life, as well as impact on persons (a fatality or a higher number of injured persons). The context of publicly being held accountable for a range of potential effects from the release of hazardous substances explains why European-based companies see process safety as bit broader than the potential for acute hazards such as fire, explosion, or acute intoxication. The prevention of sudden releases with chronic health and environmental impacts is an integral part of process safety management in Europe.
The reason for this stem primarily from the high density of companies working with markedly different chemicals and processes and their use of process safety indicators both leading and lagging reflects this broader focus on all types of releases aside from the classical acute process safety hazards. Ultimately, the aim of the process safety is to keep the materials in the pipe or vessel. Since the inception of Seveso II European Process Safety Centre (EPSC) has been closely involved in several pan European working groups involving Competent Authorities to understand how the Seveso directive is implemented and enforced within each Member State across the European Union. The aim of this work is to harmonize the effects of the Seveso directive while recognizing that an individual Member State has the discretion to implement more rigorous obligations than that contained in the directive.
PROCESS VERSUS PERSONAL SAFETY
Process safety circumscribes those activities within a major hazard environment whose aim is to keep substances within the vessel or pipe. In other words, good process safety prevents loss of containment. The consequences of getting process safety wrong include fires, explosions, and toxic releases which can result in harm to workers, damage to the environment, and interruption to business. A common pitfall is to see process safety as identical to that of personal safety and use the latter as the sole indicator of workplace safety. Personal safety across industry has enjoyed remarkable improvement in the last two decades and its success is testament to the belief that “what gets measured gets managed.”
However, bitter experience shows that many organizations who have suffered devastating major accidents have in fact reported excellent personal safety. To the casual observer, the benign neglect of process safety appears counter intuitive. This is because process safety incidents have the potential to impact many if not all workers whereas the effects of personal safety incidents are limited often to the injured party. One reason for the preoccupation with personal safety is that it is readily measured, tracked, and published within organizations and is capable of being managed and improved on the frontline as evidenced by safety observation programs.
Remedies to improve personal safety are relatively low cost and good performance in personal safety is often rewarded through bonus payments to senior staff and much of the workforce. On the other hand, a full understanding of how process safety is assured for a complex operation can be confounded by a series of independent safety barriers such that the path between hazard and consequence is obscured to all but a few experts and those with significant operational experience. The effectiveness of good process safety is therefore not readily visible. This hampers communication, on plant level as well as up to corporate level and may make it more difficult to dedicate sufficient and effective means to ensure continued process safety. One of the aims of introducing metrics for process safety is therefore to enhance its visibility such that a process safety risk is as every bit apparent as that for a personal safety risk.
PROCESS SAFETY: LAGGING AND LEADING INDICATORS
The most obvious measure of process safety is to record losses of containment such as leaks and spills of hazardous substances which can lead to more catastrophic effects. These are described as lagging indicators. Although there is no doubt that lagging indicators are an authentic reflection of process safety, they are in essence a reactive measure in that control has already been lost.
The major problem with simply relying on lagging indicator events to manage process safety is that they occur rarely and, therefore, by themselves possess little statistical relevance. Absence of incidents is not by itself an indicator of sufficient weight to confirm good process safety management. It, therefore, makes sense to examine those leading indicators which are predictors of loss of containment events. These precursor events are more numerous and lend themselves more readily to analysis and improvement. Instead of waiting for a loss of control to happen, major hazard organizations can in a proactive sense manage those activities which have direct influence on loss of control events. How can we be more proactive? It makes sense to move down the “Indicators pyramid” as depicted (Figure 1) and seek indicators that reflect activities which positively impact on process safety.
These are described as leading indicators. Leading indicators give confidence and assurance to site and company leaders that process safety is not only under control but also subject to continuous improvement. Ultimately, the bottom line is satisfactory performance in process safety as measured by lagging indicators. Furthermore, good performance in well chosen leading indicators feeds forward to good performance in lagging indicators. It is tempting to enter rather dry debates to distinguish between leading and lagging indicators. However, it is less important to argue whether indicators are leading or lagging; it is important to be proactive and the focus should be on what they impact, and how meaningful they are in steering improvement actions.
LEADING INDICATORS: EPSC MEMBER SURVEY In 2011,
EPSC invited its members to share details on leading indicators that each has introduced for process safety. A general finding is that no company uses more than six indicators, and one company uses a single leading indicator as Figure 2 indicates Specific Findings The most found indicators are Mechanical Integrity
For example, the percentage of inspections executed according to schedule, or the percentage of inspections without non-conformities. Action Item Follow up for example, the percentage of actions completed by due date. Differences are apparent in the sources of the action items included in the indicator.
Some companies track actions from incident investigation, others include actions from additional sources (e.g., audits and inspections). Training/Competence Often this indicator measures process safety training delivered.
As an indicator, this might be valid provided training has process safety specific relevance and individual competence is assessed and documented (by test, demonstration, interview etc.). Others use it as an indicator for how complete organizational roles in process safety are defined and assigned. Alternatively, you could look at the number of incidents where (lack of) process safety training or competency played a role. The table illustrates other indicators used that proved to be of value for specific companies in their specific situation. Remember that quality of indicators, not quantity, is more likely to deliver success.
HAZARD SPECIFIC INDICATORS
Even though we saw that different organizations arrive at similar leading indicators, it is vital to review the risk profile of the process safety activities and pinpoint the specific vulnerabilities. Selected indicators need to be meaningful and reflect the true risk.
Only then will efforts to improve be successful. A starting point is to identify chemical hazards throughout a plant and then to map how the hazard can give rise to a process safety incident.
A bowtie model such as the one illustrated above (Figure 3) is then applied to identify the barriers or key process safety control and mitigation measures. It is important to select indicators that directly show how well the systems are working in practice. A typical example is the number of operating window excursions or the number of challenges to a specific safety provision in each time. This type of indicator is particularly useful when the process safety risks are concentrated in one specific activity or plant operation. When process safety risks are found throughout the operations, leading indicators typically are linked to measuring the functioning of critical safety systems or procedures, such as Management of Change, Risk Assessments, Permit to Work, Mechanical Integrity, etc. For these generic safety barriers, it is conceivable to consider indicators that measure completion of a program (e.g., the % of inspections of safety critical plant equipment due for inspection and completed on time in each period) or the quality of the activity result (e.g., the % of safety critical plant equipment that performs to specification when inspected or tested). Data for certain indicators may be obtained by reviewing on a sample basis the execution of critical tasks. For example, the % of work permits issued in which the hazards, risks, and control measures were adequately specified. This offers the possibility to engage workers in peer reviews of such safety critical tasks. An additional reality check can be done by examining actual process safety incidents. We should ask ourselves what caused the incident, and then which leading indicator would have signaled the need for timely intervention and, hence, could have prevented the incident. In this manner, several of EPSC member companies try to turn results on the lagging indicator in to leading indicators. Investigating (smaller) releases or events may give a distribution of causes that then may be used to select leading indicators that steer improvements in these fields.
EMBEDDING INDICATORS,
It is wise to allow the process for collection of indicators to establish and then observe emerging trends. Does the analysis offer any surprises or suggest intervention not only for a specific indicator but also when all indicators are examined as a whole? Are the indicators going in an undesirable direction? Does the analysis invite the use of additional or realignment of resources? Be careful not to be too comforted by desirable movements in the indicators unless they can be substantiated by other sources (actual incidents, auditing, etc.). Potential improvement opportunities can be identified by comparing and indeed calibrating leading indicators across different sites within the same business. A necessary condition for introduction of indicators is that the business has a reasonable level of procedures and practices in place to help manage process safety. It is important to note that a system for leading indicators requires a proper level of resourcing in terms of data collection, recording, reporting, and review. Data from existing systems should be used as much as possible as opposed to the implementation of new and costly systems. Crucial for the acceptance may be the choice between a prescriptive approach and one that allows sites to choose their own relevant leading indicators. This choice need not mean a vast array of indicators that are used across an organization.
This remains a balancing act between selecting site specific indicators on the one hand, and more generic indicators used across sites and enabling comparison within the company. Members experience is that, when sites are given a choice in selecting indicators, each independently arrives at similar leading indicators. Still, we need to keep in mind that comparability of leading indicators between plants is to be used with caution. Comparability is influenced by culture, a different background in the way of operations, and heterogeneity of activities. This poses challenges to the comparability of leading indicators and the preference is to compare only where it really makes sense, otherwise the results should stay on local level. It is worth noting that even mature multinational organizations operating with well established process safety practices and reasonable hazard awareness throughout its workforce will need to adopt an ethos of continuous improvement to keep leading indicators as fit for purpose. Expectations of success should be that of demonstrable progress rather than overnight success.
LEADING INDICATORS DO’S AND DON’TS EPSC
Has consulted with its members on the experience in introducing and using leading process safety indicators. They have shared the following insights.
- Do not try to measure everything, start with a pilot. Gather experience in collecting the data, educating and involving the end-user and in demonstrating the added value in gaining improvement on the selected topics. Benefit from quick wins.
- Whenever you use several leading indicators, it makes sense to aim for a blend of leading indicators comprising both specific operational parameters and functioning of generic safety barriers.
- As with any reporting, it will appear that performance is becoming worse before it improves. Prior to reporting you had an impression of the tip of the iceberg. On reporting the submerged parts become visible. Allow time for sustainable improvement actions.
- Leading indicators originate at plant level where the hazards are. They have a greater relevance for operating staff and lend themselves to a greater degree of involvement from the workforce.
- Leading indicators are often expressed as a percentage or ratio and not an absolute value. They should be expressed positively (100% is desired instead of 0%, this contrasts with lagging indicators). They should promote an informed discussion on where to invest resources (money, effort).
- Only when there are good reasons to compare plants (within a site), or plants across sites, and the indicator is not expressed as a percentage, there is a need for shared indicators and normalization (have common denominator). For normalization, often the total number of employee and contractor hours in the reporting period is used. It is not directly related to process safety hazards but is a measure for the scale of operation.
- “Compliance Indicators”: The use of leading indicators that demonstrate legal compliance is not recommended. Any outcome other than 100% legal compliance is unacceptable and therefore the indicator is not helpful for steering efforts.
- Some companies may link performance as measured by indicators to a bonus. However, this method has been found to become ineffective and irrelevant over time due to an undue focus on the numbers themselves Underreporting can be a negative outcome, and employees can begin to focus on the reward rather than a risk reduced workplace. It is better to try to engage staff rather than try to “buy” commitment.
LEADING INDICATORS: HOW MANY?
the European Chemical Council, in holding an international conference on process safety performance indicators. It is evident that discussion has moved on from questioning the value of leading indicators to discussion on best practice implementation. One of the issues raised is how many leading indicators is considered sufficient. Most high hazard businesses take the view that their sites need select and report no more than six leading indicators. (UK HSE speaks of the “rule of six”).
Typical implementation consists of getting both the business and its sites to a place where they can select meaningful leading indicators relevant to their operation and then reporting these on an ongoing basis. The collector of this regular data then needs to act on the content of such reports as well as initially tolerate differences across sites in their individual definition of indicators. In contrast and at the same conference, a major energy provider, presented on a UK HSE endorsed approach which uses in the order of 100 leading indicators using standard definitions across each of its sites.
The entire business has clear line of sight of process safety performance and from top to bottom of the organization. This has necessarily involved considerable senior management commitment and workforce engagement as well as introduction of reporting software.
Such standardization is claimed to have facilitated the sharing of best practice across the business and there is no doubt that degree of standardization of leading indicators is likely to prove a hot topic for future discussion.
LEADING INDICATORS—THE MANAGEMENT CONTEXT
One of the reasons for the interest in leading indicators for process safety is that they place an additional level of scrutiny to those conventional checks in high hazard operations contained in the typical safety management system. These would be monitoring, auditing, and review activities as illustrated in Figure 4.
Monitoring activities in high hazards operations include continual checking on operating parameters such as temperatures, pressures, flow rates, and fill levels to prescribed safe operating limits. Auditing activities are a less regular check on compliance and effectiveness.
Review activities are a periodic check on whether the entire safety management system delivers on major accident prevention and reduces risk to as low as reasonably possible. Leading indicators can be viewed as occupying a space between that of monitoring and auditing in terms of prescription and frequency and in themselves are informed and subject to these same activities. So, for example the number of excursions from safe operating limits would be a credible leading indicator as would be the number of outstanding audit action items as would be the number of engineering changes stemming from a design review. Leading indicators need to evolve to reflect the major accident risks profile and should be subject to periodic audit and review.
LEADERSHIP
One of the avowed benefits of leading indicators is to provide information on process safety performance at the right level of detail to corporate and site level management. At a senior level, the ultimate ambition is that executives have access to process safety reporting in the same way that they have access to financial reporting. Both are necessary to operate a high hazards business in a risk informed fashion and can operate together to provide a balanced score card. Post implementation, the attitude of senior managers toward leading indicators can be considered a critical success factor—some common pitfalls to be avoided at this level include Viewing leading indicators as offering the complete picture as far as process safety performance without cross referencing other aspects (incident investigation, audits, safety tours) Shooting the messenger and blaming those who collect and present the report for its contents Pouncing on “red risks” and calling for their virtual eradication overnight without putting in place the necessary planning and resources
LEADING INDICATORS: FINAL THOUGHTS
Process safety performance finds itself behind that of personal safety. Leading indicators for process safety offer a way of enhancing the visibility of major accident risks and fostering risk reduction. They are now generally considered a necessary tool for effective process safety management, but they should not be seen as sufficient. The risk picture provided by leading indicators needs to be supplemented by other safety activities to offer a complete view on the state of process safety performance. EPSC member companies value working together and sharing experiences in the domain of leading indicators.
The proactive steering of improvement actions that the use of leading indicators facilitates has its value mainly within companies. This leaves unchanged the need for reporting on lagging indicators to make our process safety performance transparent in the public domain. A global, harmonized approach is now aimed for by many organizations under the flag of ICCA, including EPSC and CCPS, will hopefully bring that transparency. In that way, we can focus on working with leading indicators, aimed at preventing incidents, which appeals more to our responsible corporate citizenship.
In Europe, each member state will now be in the act of transposing the Seveso III directive into national legislation and will be considering ways as to how the clause contained in the directive on safety performance indicators is best enacted into their own law. These will necessarily be minimum requirements and will therefore create a threshold of acceptable practice for the use of leading indicators across business. Those Seveso industries which are pioneering the use of leading indicators will undoubtedly seek inspiration from high reliability domains such as nuclear and aviation sectors and import learning into their operations.