Costly accidents: are they inevitable or can they be prevented?

by Onno van Ewyk

The news that the Iron Baron had foundered off the Tasmanian coast, spilling hundreds of tons of oil and threatening wildlife, must have stunned BHP's management.

News of this sort is the CEO's worst nightmare come true. The immediate impact on the company's bottom line in terms of lost revenue and repair costs is often huge, insurance notwithstanding, but this is also often not the worst of it. Loss of life or injury to workers, and major harm to the environment can count even more heavily against the organisation involved.

The shipping industry has had its share of catastrophes, including the notorious Exxon Valdez and the Zeebrugge ferry disaster, but other industries have also figured prominently. Bhopal, and the Seveso leak of toxic gas, are just two examples of major catastrophes, while less extensive ones, such as the steam burning of repair workers at BHP's Whyalla works and a recent incident in the United States in which two scientists were killed in an explosion at a Rockwell Corp. site, happen with much greater frequency.

It would be reasonable to expect that as the world becomes increasingly technologically sophisticated the risk of such disasters would reduce but statistics suggest otherwise. Half of the 30 worst industrial accidents to occur this century (in terms of number of people killed or millions of dollars of damage), have happened in the last 20 years.

What can be done? It is tempting to simply accept that the risk of such disasters is the price to be paid for being part of an industrially complex society, but researchers have found that the causes of many incidents can be traced back to corporate management. According to Stanford University's professor of engineering management, M. Elisabeth Pate-Cornell, "most accidents are caused or encouraged by the rules and [productivity] goals set by the corporation".

For example, investigations into the sinking of the Herald of Free Enterprise ferry off Zeebrugge harbour in 1987, with the loss of 193 lives, revealed causal links in a chain which stretched from a negligent seaman through every level of management up to the Board of Directors.

The ferry sank because it left port without closing its bow doors. The seaman responsible for closing the doors was asleep, the officer responsible for monitoring the door-closing said that he thought he saw someone preparing to close them, and the Captain followed the standing order which said if no problems were reported "the master will assume, at the due sailing time, that the vessel is ready for sea in all respects". There was also a great deal of pressure placed on the crew by management to cut turnaround times. One telling company memo read, "Sailing late out of Zeebrugge is not on". The ferry's design, optimised for rapid loading, meant that it took only 90 seconds to sink, leaving virtually no time at all to evacuate passengers.

The start of the problem, confirmed by research into other disasters, is that companies don't factor in the possibility of catastrophes or their potential costs when making decisions. This is a classic 'qualitative' oversight by management and results in insufficient resources being allocated to managing safety. Once this critical step is taken, it paves the way for other initiatives which dramatically reduce the risk of catastrophes.

These initiatives coincidentally have a great deal in common with standard quality management practices. They include: giving those closest to a problem the decision-making power to respond: improving internal communication, and especially encouraging employees to come forward with bad news: not overworking employees: providing special training to alert workers to potential dangers: making sure that sophisticated technology does not diminish a worker's ability to assess a situation.

Much of the research to identify these initiatives was carried out by a team of organisational psychologists at the University of California at Berkeley. This team spent hundreds of hours studying the practices of three organisations with exemplary safety records, the US Navy aircraft carrier group, Pacific Gas and Electric Co's Diablo Canyon nuclear power plant, and the Federal Aviation Authority's air-control system.

On a Navy carrier, for example, the lowest-ranked deck worker can stop an operation if they think something is wrong, and receive a commendation for it. The carrier group reduced the rate of major mishaps from 55 per 100,000 hours of flight in 1953 to 1.89 in 1990. The FAA, despite a period of major industrial turmoil, helped reduce the death rate in air travel to one tenth of the level experienced in the 1960s.

Researchers in the field conclude that it may not be possible to completely eliminate the risk of disaster but, for most organisations, it can be substantially reduced by better management practices which will mean savings in lives, environmental damage, and profit.

25/8/1995

Sources

•"All at sea: lessons in responsibility" New Scientist 21 August 1993 •"Getting business to think the unthinkable" International Business Week 24 June 1991

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This is one of a series of articles written by Phil Cohen and Onno van Ewyk, HCi . Most of the articles were also published in the Australian Financial Review. This article may be reproduced only with the permission of HCi Consulting (email HCi ). Copyright HCi, 1993-1998.