Contractors are part of any large-scale chemical or industrial complex. They are involved in many aspects of operations such as maintenance, construction, commissioning, demolition, materials/waste handling and inspections. Often contract staff can number a few thousand people, and they may even establish permanent business addresses in a large factory or industrial complex.
At a typical chemical or industrial complex there are frequently a number of distinct operating companies, with different products, management, EH&S policy, legal structures and operating standards. These companies are part of a complex ecosystem, frequently sharing infrastructure and resources. Contractors may service many clients, sometimes rotating between companies within a single working day or shift.
Each operating company is responsible for managing its activities in terms of both legislation and EH&S policies; however, this can present a serious environmental, health and safety (EH&S) challenge, as the participants in this ecosystem pursue their own, sometimes partisan business goals.
In the eyes of the legislators the employer is responsible for the safety of each and every contractor working in hazardous conditions on its premises. Abdication of this responsibility for the safety of contractors simply because they are "not directly employed" is both irresponsible and illegal. To manage this problem effectively, the company has to have a contractor management system in place that ensures safe and responsible operations as well as the necessary financial and other controls associated with the outsourced services.
Managing contractors in the plant is not necessarily as simple as it might sound.
Gavin Halse, MD of ApplyIT
However, "managing" contractors in the plant is not necessarily as simple as it might sound. The reality is that line management structures no longer apply, as the relationship is governed by legal contract, and both parties are fundamentally pursuing different goals. In the area of safety, the commitment by senior management or the CEO to safe working practices does not necessarily carry as much weight with third-party contractors as with the company`s own employees. In particular soft issues, such as a strong safety culture which may work in the operating business, generally do not cross over into the contracting organisation.
While some operating companies put a great deal of energy into negotiating a robust contract with the contracting company to cover their obligations, frequently the person doing the work is unaware of the requirements, and even if they were aware of this detail; there is a high risk that when providing services to multiple clients, the nuances of each contract are forgotten or ignored as they move from plant to plant, or company to company.
With this as background, it is even more concerning to realise that third-party contractors are often the people involved in the most hazardous situations. This is due to the non-routine nature of the work, and the fact that these contractors are usually the least informed or trained about the hazards in a particular process.
Traditional best practices for managing this problem include site access control systems, an emphasis on induction programmes, plant work authorisations, safety officers and site meetings. But these have fundamental flaws because the essential communication between production, maintenance and contractors is often not part of the process.
One area where these elements of safety, operations, engineering and third-party contractors do come together very effectively is the permit-to-work process, and this is an excellent starting point for improving this communication across the different roles.
Notwithstanding these efforts to manage the contractor activities more effectively, there is a growing need in industry for a second-generation approach to contractor management that takes a holistic and more fundamental look at the problem. Such a system must address all aspects where humans are involved in hazardous production environments. Ideally, such a system should eliminate the fundamental differences between operating plants or companies on a site, and provide contractors with more consistency in terms of their activities - which in turn will lead to safer and more efficient activities.
An effective second-generation contractor management system would be based on a computerised system that readily crosses organisational boundaries between contractors and site companies. It would manage technical competencies of each on-site, be fully integrated into site access control, permit-to-work and work order processes. The system would integrate work order planning and project activities, and be connected into plant operations. The system would produce efficient and high integrity work permits that take account of each contractor involved in each hazardous task. The new-generation system should provide sound financial management and controls around all contractor activities. The system would integrate into and cover the full range of plant operations all the way through to the higher-level management systems found in ISO and other standards (eg, incident and near miss reporting, waste and effluent management).
The returns of such a second-generation contractor management safety system will be readily realised through improved contractor effectiveness, improved safety (reduced risk of accidents), better coordination between operations, engineering and maintenance, more relevant and granular training of third-party contractors and more accurate billing.
With enormously enhanced information technology platforms, such second-generation computer-based solutions are finally emerging and will continue to play a valuable role in solving the complexities of contractor management in a sustainable manner. It behoves the business leaders of leading manufacturing companies to investigate these solutions in the interests of their operations and the ecosystem as a whole.
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