BP Acts on Advice of Safety Review Panel

Jan. 17, 2007

BP (www.bp.com) has taken a number of actions to align with the recommendations of the BP U.S. Refineries Independent Safety Review Panel and will, after a more thorough review,

BP (www.bp.com) has taken a number of actions to align with the recommendations of the BP U.S. Refineries Independent Safety Review Panel and will, after a more thorough review, develop plans for additional safety measures. BP”s five U.S. refineries are under review due to several recent safety failures, including a deadly explosion at the company”s Texas City, Texas, facility in March 2005.

In a report made public today, the panel identified material deficiencies in process safety performance at BP”s U.S. refineries and called on BP to give process safety the same priority it has historically given personal safety and environmental performance. The panel made recommendations for improving BP”s process safety leadership, systems, expertise, and oversight of process safety performance.

The panel, led by former U.S. Secretary of State James A. Baker, III, was appointed by BP group chief executive, John Browne, in October 2005 on the recommendation of the U.S. Chemical Safety and Hazard Investigation Board (CSB). BP is cooperating with the CSB in its investigation of the March 23, 2005 explosion and fire at the Texas City refinery that claimed the lives of 15 workers and injured many more.

The panel acknowledged the company”s efforts stating that “since March of 2005 BP has expressed a major commitment to a far better process safety regime, has committed significant resources and personnel to that end, and has undertaken or announced many measures that could impact process safety performance at BP”s five U.S. refineries.” The panel also said that making dramatic change in large companies is difficult in short time frames and that the ultimate effectiveness of the actions taken or planned by BP could only be determined over time.

Based on these incidents and the results of the first few months of its preliminary
investigation of BP’s U.S.-based refinery operations, the CSB cited serious concerns about:
• The effectiveness of the safety management system at the BP Texas City refinery;
• The effectiveness of BP North America’s corporate safety oversight of its refining facilities; and
• A corporate safety culture that may have deviations from good safety practice.

The independent review panel’s initial recommendations are as follow:

Recommendation # 1
Process Safety Leadership
The Board of Directors of BP p.l.c, BP’s executive management (including its Group Chief Executive), and other members of BP’s corporate management must provide effective leadership on and establish appropriate goals for process safety. Those individuals must demonstrate their commitment to process safety by articulating a clear message on the importance of process safety and matching that message both with the policies they adopt and the actions they take.

Recommendation #2
Integrated & Comprehensive Process Safety Management System
BP should establish and implement an integrated and comprehensive process safety management system that systematically and continuously identifies, reduces, and manages process safety risks at its U.S. refineries.

Recommendation #3
Process Safety Knowledge & Expertise
BP should develop and implement a system to ensure that its executive management, its refining line management above the refinery level, and all U.S. refining personnel, including managers, supervisors, workers, and contractors, possess an appropriate level of process safety knowledge and expertise.

Recommendation #4
Process Safety Culture
BP should involve the relevant stakeholders to develop a positive, trusting, and open process safety culture within each U.S. refinery.

Recommendation #5
Clearly Defined Expectations & Accountability for Process Safety
BP should clearly define expectations and strengthen accountability for process safety performance at all levels in executive management and in the refining managerial and supervisory reporting line.

Recommendation #6
Support for Line Management
BP should provide more effective and better coordinated process safety support for the U.S. refining line organization.

Recommendation #7
Leading & Lagging Performance Indicators for Process Safety
BP should develop, implement, maintain, and periodically update an integrated set of leading and lagging performance indicators for more effectively monitoring the process safety performance of the U.S. refineries by BP’s refining line management, executive management (including the Group Chief Executive), and Board of Directors. In addition, BP should work with the U.S. Chemical Safety and Hazard Investigation Board and with industry, labor organizations, other governmental agencies, and other organizations to develop a consensus set of leading and lagging indicators for process safety performance for use in the refining and chemical processing industries.

Recommendation #8
Process Safety Auditing
BP should establish and implement an effective system to audit process safety performance at its U.S. refineries.

Recommendation #9
Board Monitoring
BP’s Board should monitor the implementation of the recommendations of the panel (including the related commentary) and the ongoing process safety performance of BP’s U.S. refineries. The board should, for a period of at least five calendar years, engage an independent monitor to report annually to the board on BP’s progress in implementing the panel’s recommendations (including the related commentary). The board should also report publicly on the progress of such implementation and on BP’s ongoing process safety performance.

Recommendation #10
Industry Leader
BP should use the lessons learned from the Texas City tragedy and from the Panel’s report to transform the company into a recognized industry leader in process safety management. The panel believes that these recommendations, together with the related commentary in Section VII, can help bring about sustainable improvements in process safety performance at all BP U.S. refineries.

The full text of the report prepared by the BP U.S. Refineries Independent Safety Review Panel is available at www.bp.com/bakerpanelreport (pdf, 2352KB). (EDITOR”S NOTE: This link has been temporarily removed from the BP Web site, pending litigation related to the March 2005 explosion at the Texas City refinery.)

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