Report from the Auditor General: Call for stricter supervision

Published on 15 January 2019, the Auditor General’s detailed report provides good descriptions of the current arrangements.

However, it identifies a need for the PSA to be stronger and clearer and for greater emphasis to be placed on company responsibility. The report specifies a series of improvement points relating to both the PSA and the companies. 

“We’ve initiated work to deal with most of the aspects which come in for criticism in the report,” says PSA director general Anne Myhrvold. 

“These efforts began after the publication of the White Paper on HSE in the petroleum industry last spring. Key points in that policy document coincide with the signals in the Auditor General’s report.”

Ambition

“Our ambition is to continue working along two axes – clarifying the responsibility of the companies and strengthening our role as a regulatory agency,” Myhrvold says.

“We’ll be more conscious about the use of our enforcement powers, and we will take steps to verify more often that nonconformities with the regulations have been closed.

“For their part, the companies must accept the responsibility they have been given. They’re the ones who must ensure that the industry is operated prudently every single day.”

The PSA’s main issue for 2019 is safe, strong, clear. This represents a direct result of processes initiated after the White Paper was approved in June 2018.

“Safe, strong, clear reflects our goal of getting a stronger grip,” Myhrvold emphasises.

Goliat

The Auditor General’s report identifies areas where the PSA has an improvement potential and circumstances which it could have handled differently. An example of the latter is the Goliat project in the Barents Sea.

“Following up Goliat has been particularly demanding, and is not representative for either the Norwegian petroleum industry in general or our supervisory practice,” says Myhrvold.

“We’ve been following this project closely for many years, and have used more resources on it than on any others in recent years. We have adopted many unusual responses along the way. 

“In some circumstances, our choice has been to engage in meetings and close dialogue with the company management rather than to utilise formal enforcement powers.”

In its report, the Auditor General notes that the PSA may have underestimated the significance of intervening early and clearly enough in important phases of the Goliat project.

“We have taken note of these comments, and remain concerned to evaluate and learn more from the Goliat process,” says Myhrvold.

Among other moves, the PSA launched a project in October 2018 to conduct a thorough review of the Goliat, Ivar Aasen and Aasta Hansteen developments with a view to securing greater insight and learning additional lessons. 

These analyses are due to be completed in the summer of 2019, and will provide important information which could benefit the industry in future developments.

Nonconformities

The Auditor General takes the view that the PSA does not apply its enforcement powers when it ought to. Myhrvold admits that this could have been correct in certain cases.

“The HSE White Paper also called for stronger and clearer supervision,” she notes. “We have subsequently reviewed our practice and concluded that we must use our ‘toolbox’ in a clearer way. That will involve more conscious use of formal enforcement powers such as orders and shutting down operations.

“We’ll also be checking more often for ourselves that the companies have closed the nonconformities we have identified. At the same time, we are demanding more binding documentation from the companies that they have actually closed identified nonconformities.”

Division of responsibilities

Norway’s current safety regime for the petroleum sector has broad support in the Storting (parliament), government and industry.

This model has crucial significance for the work of fulfilling the Storting’s ambition that the Norwegian oil and gas sector will be the world leader for HSE.

Today’s regime was established as a response to an earlier model which proved inadequate. That was characterised by detailed regulation, an inspection-oriented regulator and companies which did no more than satisfy official inspectors.

The consequence was that the companies evaded to some extent the important responsibility of being in control of their own operations.

This system was altered in 1985 to the present arrangement, which is based on trust and a clear division of responsibilities.

The purpose of this change was to give the companies a greater degree of responsibility and to build up a functioning collaboration between the parties – employers, unions and government/

Storting support

History since 1985 has shown that the present regime functions. This has been confirmed by all the assessments made of the Norwegian model in recent years.

Many of its distinctive features have been determined by the Storting. That was reaffirmed most recently in the 2017 report from the tripartite committee and the latest HSE White Paper.

The HSE regime also enjoys broad support from employees in the industry.

Learning

Learning lessons from incidents is a fundamental principle in safety work, Myhrvold emphasises.

“The level of safety in Norway’s petroleum sector could not have been where it is today if the companies and the government had not given emphasis to learning lessons and to preventive work,” she says.

After several decades of petroleum operation in Norway, the country currently has a level of safety which is internationally recognised.

However, the ambition of achieving continued improvement remains unchanged.