SAFER (SABIC ASSURANCE PROGRAM FOR EHSS RISKS)

AWARENESS & WORKSHOP

UNITED: April 02-03, 2013

No. 2

AGENDA

• SAFER Awareness:

The Need

Introduction to SAFER

• SAFER Workshop:

Introduction to Risk Matrix

SAFER Application for Process Hazard Analysis

SAFER Application for Health Assessment

SAFER Application for Environmental Assessment

SAFER Application for Pre-Startup SHE Review

SAFER Application for Mechanical Integrity

SAFER Application for MOC

SAFER Application for EHSS Incident Investigation

SAFER Application for Emergency Response & Preparedness

SAFER Application for Environmental Program

SAFER Awareness

The Need

No. 5

SAFE ACCESS SAFE EGRESS

No. 6

Night – Early Morning April 21

After

Before

April 20,2010

No. 7

7

Bhopal, India

Piper Alpha, UK

No. 8

Pasadena, Texas

YEAR PLACE CHEMICAL / INCIDENT

IMPACT

1974 Flixborough, UK Cyclohexane 29 dead

1976 Seveso, Italy Dioxin Extended Area Contamination

1979 Three Mile Island nuclear power plant

nuclear 140,000 people evacuated

1984 Mexico City, Mexico

Liquefied Petroleum Gas

650+ dead

1984 Bhopal, India Methyl Isocyanate

2000+ dead

1986 Chernobyl, USSR Radiation 31 dead

1988 Piper Alpha Gas Rupture Explosion

165 dead

1989 Phillips, TX Isobutane/Ethylene

24 dead

1991 Channelview, TX Waste Water Tank Explosion

17 dead

1998 Longford, Australia

Explosion 2 dead, 8 injured

2000 Mina Al-Ahmadi, Kuwait

Explosion 5 dead, 50 injured

2001 Toulouse, France Explosion 30 dead, 3000 injured

2005 Texas City, TX Explosion 14 dead, 80 injured

2010 Deepwater Horizon oil spill

Crude Oil Release of about 4.9 million barrels

History – Accidents Worldwide

8

No. 9

9

No. 10

Lessons From the Columbia Disaster

No. 11

FEB 1, 2003 8:59 EST

• All 7 astronauts are killed

• $4 billion spacecraft is destroyed

• Debris scattered over 2000 sq-miles of Texas

• NASA grounds shuttle fleet for2-1/2 years

• Adverse publicity

• Loss of confidence

Space shuttle Columbia,re-entering Earth’s atmosphere at

10,000 mph, disintegrates

No. 12

COLUMBIA - THE PHYSICAL CAUSE

• Insulating foam separates from external tank 81 seconds after lift-off

• Foam strikes underside of left wing, breaches thermal protection system (TPS) tiles

• Superheated air enters wing during re-entry, melting aluminum struts

• Aerodynamic stresses destroy weakened wing

No. 13

A FLAWED DECISION PROCESS

• Foam strike detected in launch videos on Day 2

• Engineers requested inspection by crew or remote photo imagery to check for damage

• Mission managers discounted foam strike significance

• No actions were taken to confirm shuttle integrity or prepare contingency plans

No. 14

SEVENTEEN YEARS EARLIER…

• January 28, 1986, the shuttle Challenger explodes 73 seconds into its launch, killing all seven crew members

• Investigation reveals that a solid rocket booster (SRB) joint failed, allowing flames to impinge on the external fuel tank

No. 15

CHALLENGER…

Liquid hydrogen tank explodes, ruptures liquid oxygen tankResulting massive explosion destroys the shuttle

No. 16

THE LEGACY

•The Commission determined that:

– SRB experts had expressed concerns about the safety of the Challenger launch

– NASA’s culture prevented these concerns from reaching top decision-makers

– Past successes had created an environment of over-confidence within NASA

– Extreme pressures to maintain launch schedules may have prompted flawed decision-making

No. 17

1. Maintain Sense Of Vulnerability2. Establish an Imperative for Safety3. Perform Valid/Timely Hazard/ Risk Assessments4. Ensure Open and Frank Communications5. Learn and Advance the Culture

– What NASA Did Not Do

No. 18

1.Mission managers discounted foam strike significance

2. NASA’s culture prevented these concerns from reaching top decision-makers

Key Points

No. 19

Could this happen to us?

No. 20

Information Overload

Introduction to SAFER

No. 22

SAFER

SABIC Assurance program For EHSS Risks:

Systematic approach for identification, Assessment, recording, mitigation & stewardship of EHSS Risks, and for appropriate approvals for continued operations till EHSS Risks are brought to an acceptable / tolerable level or ALARP (As Low As Reasonably Practicable), for EHSS Assurance during the life cycle of the plant.

No. 23

Typical Risk assessment Cycle

Decide on improvements

Level of risk unacceptable

Assess consequences

Analyse system

Identify hazards

Calculate riskDecide on

acceptability

Acceptable level

(ALARP) of residual risk

Assess frequency

No. 24

• Hazard Identification

• Risk Assessment

• Interim actions

• Mitigation Actions (with defined timeframe for implementation)

• Approvals for continued operation till resolution / completion of Mitigation actions

• Recordkeeping

• Stewardship

SAFER – Sequence of Steps

SAFER – EHSS Assurance during life cycle of the plant

No. 25

SAFER Cycle

HAZARD IDENTIFICATION/

FINDINGS

Process Hazard Analysis

Environmental Assessment

Pre-Startup SHE Reviews

Mechanical Integrity

InputsHealth Assessment

Management of Change

Action Completed, immediately to control Hazard/close Findings & it will prevent

recurrence & the Risk is same/acceptable/tolerable level (ALARP)

No

Yes

Yes NoRisk

Assessment Not Required

Hazard/Finding has effect on similar or

other Systems

EHSS Incident Investigation

Emergency Planning & Response

Environment Standards

Input for SAFER

No. 26

RISK ASSESSMENT

Analysis

Risk Class Description Risk Rating

High Risk A

Moderate Risk B

Low Risk C

Acceptable Risk D

SAFER Cycle

Risk Assessment Study Form

SABIC Global Risk Matrix expected in 1Q/2013

Consequence

A B(12) B(24) A(48) A(72) A(96)B C(6) B(12) B(24) A(36) A(48)C D(4) C(8) B(16) B(24) A(32)D D(2) D(4) C(8) B(12) B(16)E D(1) D(2) D(4) C(6) C(8)

Probability R L M H E

Criticality/Risk Rating

RISK MATRIX

No. 27

PROPOSED SABIC GLOBAL RISK MATRIX - DETAILED

Likelihood

Financi

al (Global/Site)

Financial (%

OPEX or

Annual budget)

Reputation Operations (Production loss)

Health & Safety Environment

L5 L4 L3 L2 L1<0.01% >0.01%-0.1% >0.1- 1% >1 – 10% >10% Probability

(Operational)

<1% > 1-10% > 10-30% > 30-60% > 60% Probability (Financial & Strategic)

The scenario is not foreseen to occur

and is not recorded in the

industry/branch*

The scenario may occur in exceptional circumstances but has been recorded in similar industry/

branch*

The scenario has occurred in SABIC or has happened more than once per year in similar industry/

branch*

The scenario has happened once

before at the location / site or

more than once per year in SABIC

The scenario is almost certain to

occur and has happened several times per year atthe location / site

Qualitative

C1Global

>$100Mn

>20%Regional media coverage

over multiple daysOr

Global media coverage

Equivalent to > 5 days

SHEM-10PSI Level-1:

Multiple fatalities to SABIC

employees/contractorsor public fatality

SHEM-10 PSI Level-1

(2)2

C1-L5

(2)2

C1-L4

(1)1

C1-L3

(1)1

C1-L2

(1)1

C1-L1

Chemical release of greater than 20 times the Threshold Quantity

Release/ spillage> 10 MT of Hazardous Chemicals/ Substance

or Hazardous Waste

Site >$10Mn

C2Global >$10-

100Mn>15-20%

National media coverage over multiple days

OrSingle regional

media coverage

Equivalent to >3-5 days

SHEM-10Class A/PSI Level-2:Fatality or multiple

lost workday injuriesto SABIC

employees/contractorsor public injuries

SHEM-10 Class A PSI Level-2

3

C2-L52

C2-L42

C2-L3

(1)1

C2-L2

(1)1

C2-L1

Chemical release between 9 – 20 times the Threshold Quantity

Release/ spillage> 10 MT of Hazardous Chemicals/ Substance

or Hazardous WasteSite

>$1-10Mn

C3

Global >$1m-10Mn

>10-15%

Local media coverage over multiple days

Or Single national

media coverage

Equivalent to >1 – 3 days

SHEM-10Class B/PSI Level-3:

Lost workday injuriesto SABIC

employees/contractors

SHEM-10 Class B PSI Level-3

4 C3-L5

3C3-L4

2C3-L3

2 C3-L2

(1)1

C3-L1

Chemical release between 3 – 9 times the Threshold Quantity

Release/ spillage between 4-10 MT of Hazardous Chemicals/ Substance or Hazardous

WasteSite >$0.1m-

1MnRelease/spillage of > 50 MT of Non-Hazardous

Chemicals/ Substance

C4

Global >$0.1Mn-

1Mn

>5-10% Single local media coverage

Equivalent to >8-24 hours

SHEM-10Class C/PSI Level- 4:

Medical treatment to SABIC

employees/contractors

SHEM-10 Class C PSI Level-4

4 C4-L5

4 C4-L4

3C4-L3

2 C4-L2

2C4-L1

Chemical release between 1 – 3 times the Threshold Quantity

Site>$0.01Mn-

0.1Mn

Release/ spillage between 0.1- 4 MT of Hazardous Chemicals/ Substance or Hazardous

Waste

Release/spillage between 20-50 MT of Non-Hazardous Chemicals/ Substance

C5Global

<$0.1Mn

<5% Only internal communications

Equivalent to < 8hrs

SHEM-10Class D/PSI Level NA:

First aid to SABIC

employees/contractors

SHEM-10 Class D PSI Level NA

4 C5-L5

4C5-L4

4C5-L3

3C5-L2

3C5-L1

All other chemical release that does not meet the Threshold Quantity

Site<$0.01Mn

Release/ spillage <0.1 MT of Hazardous Chemicals/ Substance or Hazardous Waste

All other incident release/spillage <20 MT of Non-Hazardous Chemicals/Substance

Cons

eque

nce

Draft

No. 28

SAFER Cycle

Acceptable RiskNo Action- Proceed

Yes

Interim Actions

No

Action

Acceptable Risk

NoYes

Approval for continued operation

Record &Report

Approval Update Records

Renewal

Further Reduction possible

No

No

Yes

Yes

Microsoft Office Excel Worksheet

No. 29

Typical Risk Management Vs SAFER

Typical SAFERHazard Identification:• PHA Studies (design/revalidation)

Hazard Identification:• For on going EHSS Assurance during life cycle of the plant:

o Process Hazard Analysis

o Health Assessment

o Environmental Assessment

o Pre-Startup SHE Reviews

o Mechanical Integrity

o Management of Change

o EHSS Incident Investigation

o Emergency Planning & Response

o Environment Standards

Risk Assessment Risk Assessment

Interim Actions till resolution/ Completion of Mitigation Actions

Mitigation Actions• Actions for Risk Reduction

Mitigation Actions• Actions for Risk Reduction

• Timeframe defined for different Risk levels

Approval(s) for Continued Operation till resolution

Stewardship• Inconsistent

Stewardship• Consistent involving appropriate levels

No. 30

Risks: Identify appropriate actions to bring all Risks to “Acceptable” Level or “ALARP”.• Interim Action should bring the Risk to “Acceptable” Level or “ALARP” or at least to

Lower Risk Level.• High/ Moderate & Low Risks: Obtain formal approval for continued operations till

resolution.• No actions on “Acceptable Risks”.

Bypassing of EHSS (SHE) Critical/Emergency Response Equipment: only if the Risk is in “Same Level” (as with equipment that is isolated/bypassed).

MOC: • Implement if the Residual Risk is in “Acceptable” Level or “ALARP” (with approvals

for the level of Risk) . • Do not implement if it is in “High Risk” Level.

Exception: Moderate or Low Risk (if it is “ALARP”) may be “Accepted” with formal approvals, if risk cannot be further reduced.

All High / Moderate & Low Risks Findings shall be approved by the concerned management verbally on immediate basis and in written form within 3 working days.

If any Finding is corrected immediately then the Risk Assessment of this Finding is not to be included in SAFER Tracking.

SAFER – Risk Mitigation Guidelines

No. 31

High Risks:

• Target Date shall be assigned for High Risks to be reduced to “Acceptable” Level or “ALARP”.

• Formal approval/Extension from L1 or Head of the Affiliate / Site for all High Risks for continued operations till resolution / completion of Mitigation actions (maximum period for each Approval / Extension – Three months).

SAFER – Risk Mitigation Guidelines

High Risk Approval

No. 32

Moderate Risks:

• Target Date shall be assigned for Moderate Risks to be reduced to “Acceptable” Level or “ALARP”.

• Formal approval/Extension from Concerned L2 or General Manager or Equivalent Position for all Moderate Risks for continued operations till resolution / completion of Mitigation actions (maximum period for each Approval/Extension – Six months).

• Approval from L1 or President or Head of Affiliate/Site for continued operations if further Risk reduction is not possible.

SAFER – Risk Mitigation Guidelines

Moderate Risk Approval

No. 33

Low Risks:

• Target Date shall be assigned for Low Risks to be reduced to “Acceptable” Level or “ALARP”.

• Formal approval/Extension from Concerned L3 or Department Manager for all Low Risks for continued operations till resolution/completion of Mitigation actions (maximum period for each Approval/Extension – Twelve months).

• Approval from Concerned L2 or General Manager or Equivalent Position for continued operations if further Risk reduction is not possible

SAFER – Risk Mitigation Guidelines

Low Risk Approval

No. 34

Monthly Review of status of all the Risks by the EHSS Committee of Division & Entity.

Every Quarter, High/ Moderate Risk Status issued to SABIC EHSS Global Assurance.

High Risk Status to be sent to Board.

SAFER Record issued to Enterprise Risk Management Department.

Stewardship Mechanism

SAFER Record SAFER Centralized Tracking System

No. 35

KPIs

Annual SHEM compliance targets.

% of High Risk Findings closed.

% of Moderate Risk Findings closed.

% of Low Risk Findings closed.

No. 36

• Continue SAFER awareness

• Update SHEM-02

• Stewardship Mechanism

• Implement SAFER 1.Process Hazard Analysis

2.Health & Env. Assessment

3.Pre-Startup SHE Review

4.Mechanical Integrity

5.MOC

6.Incident Investigation

7. Emergency Response

8. Environmental Program

• Generate KPIs

SAFER – What’s Next?