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The Times
They are a Chang'in was the title given to the talk presented
by Richard Gillis to the SLP on 5th February 1999. |
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Richard
used the title of the Bob Dylan song, as the reference
is as valid today as it was in the 1960s when Dylan wrote
his song. |
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We
are in the midst of an enormous upheaval in the petroleum
and petrochemical business. Mergers, acquisitions, divestitures,
joint ventures, re-engineering and right sizing are
announced regularly.
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In 1998 the Exxon - Mobil,
BP - Amoco, Total - Petrofina mergers were announced.
These will cost over $US 150 billion, save over $US 3
billion per year but at the cost of well over 10,000 jobs.
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The objectives for the
changes in the business include cost minimisation, profitability
and efficiency. |
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The consequences to the
organisations are reduced resources in the area of loss
prevention, a reduced capacity to manage the potential
risks, a reduced capacity to influence management and
the authorities whilst the demands for reducing losses
increases. |
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Does it work? The business
writers seem to be coming to the conclusion that companies
that re-engineered are not making the sustained planned
profits originally claimed. The causes are many and varied,
ranging from incompatible company cultures to power sharing
between the top executives. However the changes do have
a big impact on our jobs and careers. |
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The consequences to the
loss control function is a need to demonstrate cost-effectiveness |
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The personal consequences
are that the future will be very different to the past.
Job security can no longer be taken for granted. Consultants,
either internal or external will become more common. If
we are not a consultant then we will be managing consultants.
The industrial hygiene employment demographics in Australia
over the past 10 years have seen the percentage of consultants
rise from 10 to nearly 50%. |
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We will have our competency
challenged. Multi-skilling in the loss prevention functions
will be required to ensure our future careers. An American
Industrial Hygiene Association survey found that in the
period 1997-2002 82% of it's members expect to move from
working industrial hygiene issues to working safety, health
and the environment issues. |
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Our approach to the management
of our functions will also change. The effectiveness of
our activities will need to be in mind-set of a SHE specialist.
Some companies are using loss control specialists not
only as a marketing tool but also by consulting as a profit
centre in the company. |
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The loss control functions
are also changing rapidly. Management systems are being
introduced to provide a basis to manage potential risks
using a standardised, systematic approach. ISO 14000 is
making rapid advances. The BS 8800:1996 Guide to Occupational
Health and Safety Management Systems (HS(G)65) was introduced
in England. However the ISO 18000 Safety and Health management
system was delayed in September 1996. The need for a management
system still exists so the American Industrial Hygiene
Association has introduced their own OH&S Management
System. Many companies have their own systems. |
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Loss prevention will need
to be managed like other business activities, using management
language, not technical jargon. Management is focused
on costs. Consequently we may need tools such as activity
based costing to show the real cost of loss prevention
programs. The programs will need to be defensible in demonstrating
effectiveness. Measures of failure are an inadequate performance
indicator. Health is a problem as latency and lack of
specific causes for ill health endpoints preclude measuring
health failures effectively. There will be a need to demonstrate
risk management processes are in place using process activity
measures in lieu of measures of failure. |
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The loss control issues
whilst retaining the classic issues will also see the
emergence of a new range of issues. These will range from
specific technical issues to wide ranging issues with
political management. The emerging issues will be forever
more subtle problems associated with very low levels of
exposure or synergistic effects, potentially significant
but often unproven effects about which there will be competing
technical opinions as science does not have or cannot
provide answers. |
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Our ability to be able
to monitor more hazards at ever decreasing limits of detection
will provide a problem in interpretation. Access to information
from the Internet will level the knowledge base so that
employees, activist groups and communities can be well
informed. |
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Risk communication to allay
community concerns about unknown consequences of our actions
if unsuccessful will attract the attention of activist
groups, local and international, and the possibility that
the precautionary principle will be invoked. Managing
risk communication will become vital if we are to minimise
external pressure on our company businesses. |
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The SME will be unchanged.
Management does not have the loss control skills, know
the law, nor have the support to improve their performance.
The SME will still require assistance. Even just maintaining
regulatory compliance is not adequate, as the minimum
standards do not protect against future liability or imposition
of external controls. |
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Large enterprises have
fewer functional resources - fewer people knowledgeable
in area - in ability to identify need for assistance -
inability to manage contractors. |
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The good old days are just
that. The future will be different and not easily predictable.
The times they are a chang'in. |
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