Facility construction involves a wide variety of risks. Factors impacting owner investment decisions can be quite complex and may vary significantly from region to region and project to project. Contractors face similar difficulties when they consider working outside of their resident jurisdiction. The risks arise from many areas such as legal requirements, construction systems, technology, and management techniques. The success of a specific venture, and in some cases the viability of an organization, can hinge on an understanding of the risks associated with such projects. Construction projects that fail to meet scope, budget, and schedule can result in a host of impacts with serious economic, social, and political ramifications.
Many experts agreed that the company that earned the highest profit has a good risk management system. Management of Risk (MoR) is not only about avoiding explosions or natural disasters. In fact for most businesses it is about profit. And many businesses do it without really understanding how better risk management could help their organization achieve its goals. Risk management proponents say that the better the organization is at managing risk, the more profitable it will be.
In summary, a certain amount of risk taking is inevitable, and even to be encouraged, if an organization is to achieve its objectives. Objective management and acceptance of risk helps to improve performance by contributing to:
a. Increased certainty and fewer surprises
b. Better service delivery
c. More effective management of change
d. More efficient use of resources
e. Better management at all levels through improved decision making
f. Reduced waste and fraud, and better value for money
g. Innovation
h. Management of contingent and maintenance activities
Although there are many improvements of management in Vietnam, the construction industry still has to face many changes in both market and government policies. The causes are many but one of them is the lack of attentiveness with the important of the risk management process.
Besides, the value of systematic risk management of project activity is not fully recognized by the construction industry (Walewski, et al. 2002). Since no common view of risk exists, owners, investors, designers, and constructors have differing objectives and adverse relationships between the parties are common. Attempts at coordinating risk analysis management between all of the project participants have not been formalized and this is especially true between contractors and owners.
Moreover, the construction engineers were not familiar with the risk management issues and they found it was hard when working in a competitive climate, especially in a project. Because of lack of knowledge of management and risk management, they were not preferred with the relevant works such as planning than the technical issues like designing or calculating structural. Thus it is understandable if they were unaware of risks and less concerned of risk management. Therefore, a study of risks and risk management is necessary and beneficial to all of the construction industry in general and Port & Waterway Projects particularly. In summary, the problems are stated as follow:
§ The ambiguous of risks and risk management of the Vietnamese engineers.
§ The lack of awareness and knowledge of risk management.
Mr. Nguyen Viet Dung made a case study which focused on the management of risks in P&W projects in Southern Focal Economic Area (SFEA). The framework of his research started with the findings of risk management that include risk management planning, risk identification, risk analysis, risk response and risk monitoring and control which followed by the analysis and the discussion. Based on the collected information, improvement suggestions will be made to improve effectiveness in risk management in port and waterway projects in SFEA of Vietnam. His specific objectives were:
§ Finding the potential risks and how are they managed in P&W projects
§ Suggest how to effectively manage risks in port & waterway projects.
His study was conducted with the intention of giving more benefit to the engineers working on P&W projects though it could be useful for other fields of the construction industry. He found out that the most important risks consisted of 1) corruption and bribery, 2) budget viable (contractor), 3) incompetent project team, 4) changes in law and regulation, and 5) inadequate designer.
He investigated two projects were the picture of risk management in P&W projects was clearly defined. In both studied projects, they have formal processes of risk management and are constantly improving by practicing experience. The process consisted of 4 main stages:
1. Risk management planning - although most of interviewees agreed about its importance, it is still not utilized carefully. Project budget and project management plan are important and usually used.
2. Risk identification and analysis - performance is quite fine. A few formal standards have been applied and encouraged the engineers to participate. The project budget is considered as the most concerned subject, while business environment factors are accounted to cope with changes in the market. Tools and techniques which based on historical data and experience are highly utilized. The engineers prefer easy and convenient methods to do their work when it proves useful and is accepted by the authorities.
3. Risk response - mitigation and sharing are mostly utilized and have high effectiveness when these strategies could make the stakeholders reach agreement without arising disputes and losing time. Thus the experts with high skill of negotiation are needed to motivate the relevant parties and ensure the success of the agreement.
4. Risk monitoring and control - though new risks appearing in the project life aren’t identified very well, it is successful in other means. By applying “risk audit” and “technical performance measurement”, the risk responses and risk management process is evaluated and necessary activities will be implemented to ensure the success of achieving the project’s objectives. However new risks could be major problems if they are ignored, especially in complex projects where risks can’t be recognized fully in identification stage. Therefore applying the strategies to continuously uncover the new risks such as “risk reassessment” is suggested to make the risk management process concrete.
At present, risk management is still a new area in the management field. Therefore, facing difficulties are frequent and unavoidable.
Mr. Dung found out that although the founded general attitude was that risk management was already so much of concern. Thus if more effort was put into it, no other work would get done. He also found out that the transferring of risks and risk management knowledge from project to project was poor. The interviewees admitted that even if they proposed a new solution and put serious effort into transferring that knowledge to others, but it would be difficult even within their own organization.
In theory, although many methods of carrying out risk management processes are presented, they were not in practice. Some of the interviewees were working with risk management, and they admitted that they had little knowledge about risk management methods. Professionalism and experience are very important in identifying and managing risks, but it is necessary to encourage larger participants and apply more appropriate tools and techniques.
Formal methods of communicating and of sharing experiences and knowledge of risks and risk management were missing or inadequate. That is why in order to secure the activities of the project, it is important to adapt the most suitable approach. Therefore, risk management courses for all construction project engineers are necessary to increase the level of knowledge of formal risk management processes. Furthermore, understanding its benefits would increase the willingness to invest in risk management and capabilities to do it.
His thesis abstract is copied and posted
Abstract
Project risk management has been a subject of intensive discussion in recent years. Still, research on how project risk management should be adopted is inadequate. The objectives of this study are to identify the risks and how to manage risks in Port and Waterway (P&W) Projects. The focus of the study is on the means for risk management. The purpose is to emphasize the importance and requirement of risk management.
The study was conducted with 7 interviews in two different P&W projects and mainly targeted to the engineers involved in the projects. Literature searches were mostly done by using AIT library materials and databases.
Empirical study was used to show the application area for risk management derived from literature. Based on this, a picture of risk management in P&W projects was formed. The basic idea of the picture is to sensitize the engineers regarding the potential risks and suggest how to manage them. According to the understanding gained during this study, it is suggested that by enabling more caution of risk management methods, project risk management will become more efficient and the inefficient and costly activities identified would be reduced.
Used Mining Equipment for Sale: for Melton Project, Australia
Used Mining Equipment for Sale: The Melton project comprises tenements EL3911 and EL4000 as MSloane Consulting provides used mining equipment for sale for mining projects worldwide. Situated on the northern Yorke Peninsula, the tenements cover 165km2 in the northern extension of the Pine Point Fault. The region has iron oxide-copper-gold-uranium mineralisation consistent with the fault area. The region also features many distinct magnetic and gravity characteristics. Historical deposits of the Moonta-Wallaroo copper-gold district are found in this region.The project is situated close to mine and civil infrastructure. Its proximity to major centres and good access to road and rail infrastructure makes it a significant project for Marmota Energy.
To identify the anomalies and gather detailed information about the region's mineralisation, Marmota Energy initiated a high-resolution aeromagnetic survey of the area in September 2009. A close intersection between copper mineralisation, gold and uranium was reported by Rex Minerals, which drilled the hillside prospect, 40km south of the Melton Project. The major intersections at the hillside project included 259m at 1.7% copper and 0.4 g/t gold and 200m at 1.0% copper and 0.2 g/t gold. Anomalous uranium was also reported in several holes.
The survey consisted of flight lines spaced 50m apart. Along with the preliminary magnetic data, the survey revealed up to five high-priority targets in the region. Five anomalies were revealed within the Pine Point fault zone.
The largest anomaly extended for more than 4km, while the smallest measured approximately 1.6km. Two distinct magnetic anomalies trending in the north-south direction extended up to 2km in length. Three magnetic anomalies have also been spotted in the survey, situated west of the fault zone.
Exploration will continue for another six months to determine the structural features of each target area. The company will undertake an infill ground magnetic survey of the region in October 2009.
On its successful completion and indication, the company will further perform a high-resolution ground gravity survey in November 2009. Between November 2009 and February 2010, depending on the harvest requirements, Marmota will conduct drilling tests on the targets.
The exploration will be funded by Marmota Energy. Within two years the company will invest $400,000 on exploration. By early 2010, Marmota will reach 50% of the expenditure commitment. Alongside Marmota, the exploration will be co-funded with funds raised from the placement and share purchase plan released in September 2009.
Factors In Power Purchase Agreements Affecting Investment Flows In Independent Power Production In The Nepalese Environment
“Public private partnerships (PPPs)” have a critical role to play in implementing the development projects in developing countries. Traditionally, the responsibility of constructing and operating infrastructure facilities had rested with the government, but with the growth of economy outstripping infrastructure supply (Gupta and Sravat, 1998) and the need for providing infrastructure facilities to keep up the pace of development, the burden of infrastructure development has been shifted to private sector through concession contracts such as Build-Own-Transfer (BOT). As the term implies, public private partnership is a structure that implements and carries infrastructure projects into effect on a basis of partnership, each sector contributing what it does best.
In South Asia, private participation in electricity was oriented mainly towards building generation capacity also in the form of independent power producers (IPP). This focus reflects the need in the region to expand generation capacity to keep pace with expected demand. Nepal alone with substantial hydropower capacity will require an investment estimated to be US$ 1.8 billion (Private Participation in Infrastructure: Trends in Developing Countries in 1990-2001, 2001) for the expansion of the power sector for domestic demand over the next ten years. With the declining trend of availability of scarce public resources soft loans and grants from multilateral and bilateral agencies, such financial resources will have to be mobilized through the private sector, in the form of IPPs.
Despite having a feasible generation potential of about 43000 MW and with a demand growth rate of about 10%, Nepal's current total installed capacity is only about 526MW with only 40% of the total population having access to electricity. The quality of the supply is poor, system losses high, and power shortages persistent. The cost of electricity for the consumers in Nepal is also one of the highest in South Asia.
Project Sponsors and lenders seek to reap adequate returns in stable environments, minimizing political, financial, operational and other risks associated with the project ensuring a steady stream of revenues.
Likewise, the state owned public enterprises will want to limit the abuses of monopoly power by the private operator and will seek to maximize production efficiency. The responsibility of the state owned enterprises also lies in ensuring the appropriate quality, environment, health standards and social justice.
Similarly, other stakeholders to IPPs have interests ranging from social welfare from the project company to reasonable costs of services.
Private hydropower production is still in the phase of evolution in Nepal, and the process is proving to be slow and expensive. Prospective developers continue to face risks and difficulties and fifteen years after the introduction of the Hydropower Development Policy in the early 1990s, the government of Nepal has only been able to attract limited private investments in power generation.
As pointed out by Head (2000), all private infrastructure development carries common risks such as political, currency exposure, force majeure etc. but hydropower is perceived as being exposed to additional risks in project definition, risks in hydrology, environment, financing, and regulatory risks. Even straightforward issues like scheduled outages and contract energy have led to disputes in PPAs in the Nepalese environment. Therefore, in the process of designing PPAs, a variety of questions need to be asked about the best feasible means satisfying the concerned parties allowing them to come to a zone of possible agreement.
Mr. Raju B. Shrestha made a research which aimed to 1) identify the underlying factors in PPAs in hydropower production in the Nepalese environment; b) identify how the principle issues affect the stakeholders; and 3) identify ways to address the principle issues
He believed that the benefits of his study will have contributions to the body of knowledge pertaining to PPAs in the Nepalese environment.
· Assessment of the underlying factors for project sponsors, utilities, lenders and the host Government.
· The impact of the underlying factors to the concerned parties.
· Positions of the concerned parties, their shared interests, and uncertainties.
· The strategy to adopt for future projects.
His analyses of the PPAs concluded to date, and the perception study of the prime stakeholders has shown the following:
· The analyses of the PPAs concluded to date in the Nepalese environment have shown that discriminatory clauses and unequal treatment are present in the key issues of the agreements.
· The prime stakeholders have divergent perceptions in the key issues of the PPAs, and that not all the clauses have been acceptable to the parties concerned. The responses of the prime stakeholders of the contracting parties reflect the past trends and practices in PPAs between the utility and the IPPs of various types.
From this study, the contracting parties can better evaluate future projects as well as negotiate the terms in the PPAs and provide suitable alternatives wherever required. The past trends of PPAs, the degree of convergence of opinions in each clause in terms of its importance and its importance in inclusion in PPAs can be evaluated. This will facilitate the contracting parties in negotiations to come to agreement sooner and successfully conclude PPAs.
The responses regarding the clauses of the PPAs of the other major stakeholders, namely the lenders and the government, will further help in facilitating successful conclusion of PPAs. His conclusions are categorized in 5 aspects such as:
1. Power Purchase Guarantees
a. Take or Pay Clauses
b. Purchase Guarantees of Interim Energy
c. Supply Guarantee of Minimum energy
d. Purchase Guarantee of Excess Energy
e. Two Part Tariff- Demand Charge
f. Third Party Sales Guarantees
The clauses in the PPAs are more favourable to IPPs with foreign investment than IPPs with local investment with guarantees of purchase of excess energy, interim energy, and better escalation rates, more coverage from exposure to political and changes in law risks.
· The clauses of the PPAs with investment in JV with the Utility have favourable clause for the project sponsors with better escalation rates and purchase guarantees of excess and interim energy than projects with local investment, and explicit clause covering political risks.
· Take or pay clause has not been favourable to the utility as it has resulted in losses.
2. Force Majeure Guarantees
a. Political Risk s
b. Natural Disasters
c. Changes in Law
d. Buyout Clauses
3 Financial and Foreign Exchange Guarantees
a. Convertibility
b. Repatriation
c. Devaluation
d. Escalation
f. Tax Holidays
g. Concessional Funding
4. Operation Risks
a. Dispatch Rights
b. Scheduled Outages
c. Availability Declaration
d. Maintenance Clauses
5 Other Risk Mitigating Measures
a. Dispute resolution Methods
b. Informal Dispute Resolution Methods
c. Arbitration
d. Insurance
e. Insurance Before RCOD
f. Insurance after RCOD
His thesis abstract is copied and posted.
ABSTRACT
With the Introduction of Hydropower Development Policy in the early 1990s, combined with the changes in electricity legislation and the opening up of the power industry to the private sector, Independent Power producers (IPPs) have been playing a bigger role in the development of the electricity sector. However, further investment in this sector has been difficult to mobilize, and part of this difficulty can be attributed to the factors in the existing Power Purchase Agreements (PPAs) and inconsistencies in the guarantees provided by the state owned utility.
The research provides the underlying factors in PPAs in hydropower production in the Nepalese environment, which are of most significance to the stakeholders of independent power production. The research is carried out with a triangulation approach taking into account both the qualitative viewpoint, in the form of comparative studies; and quantitative viewpoint, a questionnaire survey, regarding issues of PPAs.
From a pool of existing independent power producers, 10 PPAs are compared for patterns of specific variables by examining, categorizing and tabulating the underlying factors of PPAs. Opinions in the form of a questionnaire are sought from the stakeholders and the means of the ranks tested by Kruskal-Wallis tests to see if the perceptions of the stakeholders differ in the key issues of PPAs. Further, Mann-whitney tests are carried out to examine the difference in the perception between the pairs of stakeholders in the key issues of PPAs.
The research shows that discriminatory clauses and unequal treatment are present in key issues of the agreements. Questionnaire survey of the stakeholder’s shows the significant clauses of the PPAs and the clauses most likely to be included in PPAs by the stakeholders. With the knowledge of the underlying factors in PPAs, the research allows the stakeholders of the power production to clearly understand the positions of the parties involved. The parties can combine their shared interests to create a joint value and deal with multiple issues and make trades between them, eventually both the parties getting something that they value.
In South Asia, private participation in electricity was oriented mainly towards building generation capacity also in the form of independent power producers (IPP). This focus reflects the need in the region to expand generation capacity to keep pace with expected demand. Nepal alone with substantial hydropower capacity will require an investment estimated to be US$ 1.8 billion (Private Participation in Infrastructure: Trends in Developing Countries in 1990-2001, 2001) for the expansion of the power sector for domestic demand over the next ten years. With the declining trend of availability of scarce public resources soft loans and grants from multilateral and bilateral agencies, such financial resources will have to be mobilized through the private sector, in the form of IPPs.
Despite having a feasible generation potential of about 43000 MW and with a demand growth rate of about 10%, Nepal's current total installed capacity is only about 526MW with only 40% of the total population having access to electricity. The quality of the supply is poor, system losses high, and power shortages persistent. The cost of electricity for the consumers in Nepal is also one of the highest in South Asia.
Project Sponsors and lenders seek to reap adequate returns in stable environments, minimizing political, financial, operational and other risks associated with the project ensuring a steady stream of revenues.
Likewise, the state owned public enterprises will want to limit the abuses of monopoly power by the private operator and will seek to maximize production efficiency. The responsibility of the state owned enterprises also lies in ensuring the appropriate quality, environment, health standards and social justice.
Similarly, other stakeholders to IPPs have interests ranging from social welfare from the project company to reasonable costs of services.
Private hydropower production is still in the phase of evolution in Nepal, and the process is proving to be slow and expensive. Prospective developers continue to face risks and difficulties and fifteen years after the introduction of the Hydropower Development Policy in the early 1990s, the government of Nepal has only been able to attract limited private investments in power generation.
As pointed out by Head (2000), all private infrastructure development carries common risks such as political, currency exposure, force majeure etc. but hydropower is perceived as being exposed to additional risks in project definition, risks in hydrology, environment, financing, and regulatory risks. Even straightforward issues like scheduled outages and contract energy have led to disputes in PPAs in the Nepalese environment. Therefore, in the process of designing PPAs, a variety of questions need to be asked about the best feasible means satisfying the concerned parties allowing them to come to a zone of possible agreement.
Mr. Raju B. Shrestha made a research which aimed to 1) identify the underlying factors in PPAs in hydropower production in the Nepalese environment; b) identify how the principle issues affect the stakeholders; and 3) identify ways to address the principle issues
He believed that the benefits of his study will have contributions to the body of knowledge pertaining to PPAs in the Nepalese environment.
· Assessment of the underlying factors for project sponsors, utilities, lenders and the host Government.
· The impact of the underlying factors to the concerned parties.
· Positions of the concerned parties, their shared interests, and uncertainties.
· The strategy to adopt for future projects.
His analyses of the PPAs concluded to date, and the perception study of the prime stakeholders has shown the following:
· The analyses of the PPAs concluded to date in the Nepalese environment have shown that discriminatory clauses and unequal treatment are present in the key issues of the agreements.
· The prime stakeholders have divergent perceptions in the key issues of the PPAs, and that not all the clauses have been acceptable to the parties concerned. The responses of the prime stakeholders of the contracting parties reflect the past trends and practices in PPAs between the utility and the IPPs of various types.
From this study, the contracting parties can better evaluate future projects as well as negotiate the terms in the PPAs and provide suitable alternatives wherever required. The past trends of PPAs, the degree of convergence of opinions in each clause in terms of its importance and its importance in inclusion in PPAs can be evaluated. This will facilitate the contracting parties in negotiations to come to agreement sooner and successfully conclude PPAs.
The responses regarding the clauses of the PPAs of the other major stakeholders, namely the lenders and the government, will further help in facilitating successful conclusion of PPAs. His conclusions are categorized in 5 aspects such as:
1. Power Purchase Guarantees
a. Take or Pay Clauses
b. Purchase Guarantees of Interim Energy
c. Supply Guarantee of Minimum energy
d. Purchase Guarantee of Excess Energy
e. Two Part Tariff- Demand Charge
f. Third Party Sales Guarantees
The clauses in the PPAs are more favourable to IPPs with foreign investment than IPPs with local investment with guarantees of purchase of excess energy, interim energy, and better escalation rates, more coverage from exposure to political and changes in law risks.
· The clauses of the PPAs with investment in JV with the Utility have favourable clause for the project sponsors with better escalation rates and purchase guarantees of excess and interim energy than projects with local investment, and explicit clause covering political risks.
· Take or pay clause has not been favourable to the utility as it has resulted in losses.
2. Force Majeure Guarantees
a. Political Risk s
b. Natural Disasters
c. Changes in Law
d. Buyout Clauses
3 Financial and Foreign Exchange Guarantees
a. Convertibility
b. Repatriation
c. Devaluation
d. Escalation
f. Tax Holidays
g. Concessional Funding
4. Operation Risks
a. Dispatch Rights
b. Scheduled Outages
c. Availability Declaration
d. Maintenance Clauses
5 Other Risk Mitigating Measures
a. Dispute resolution Methods
b. Informal Dispute Resolution Methods
c. Arbitration
d. Insurance
e. Insurance Before RCOD
f. Insurance after RCOD
His thesis abstract is copied and posted.
ABSTRACT
With the Introduction of Hydropower Development Policy in the early 1990s, combined with the changes in electricity legislation and the opening up of the power industry to the private sector, Independent Power producers (IPPs) have been playing a bigger role in the development of the electricity sector. However, further investment in this sector has been difficult to mobilize, and part of this difficulty can be attributed to the factors in the existing Power Purchase Agreements (PPAs) and inconsistencies in the guarantees provided by the state owned utility.
The research provides the underlying factors in PPAs in hydropower production in the Nepalese environment, which are of most significance to the stakeholders of independent power production. The research is carried out with a triangulation approach taking into account both the qualitative viewpoint, in the form of comparative studies; and quantitative viewpoint, a questionnaire survey, regarding issues of PPAs.
From a pool of existing independent power producers, 10 PPAs are compared for patterns of specific variables by examining, categorizing and tabulating the underlying factors of PPAs. Opinions in the form of a questionnaire are sought from the stakeholders and the means of the ranks tested by Kruskal-Wallis tests to see if the perceptions of the stakeholders differ in the key issues of PPAs. Further, Mann-whitney tests are carried out to examine the difference in the perception between the pairs of stakeholders in the key issues of PPAs.
The research shows that discriminatory clauses and unequal treatment are present in key issues of the agreements. Questionnaire survey of the stakeholder’s shows the significant clauses of the PPAs and the clauses most likely to be included in PPAs by the stakeholders. With the knowledge of the underlying factors in PPAs, the research allows the stakeholders of the power production to clearly understand the positions of the parties involved. The parties can combine their shared interests to create a joint value and deal with multiple issues and make trades between them, eventually both the parties getting something that they value.
A Study Of Safety Management System And Audit In Oil And Gas Construction Projects In Ba Ria – Vung Tau, Vietnam
According to the report of International Labour Organization (URL 10, Website of ILO), 270 million accidents and 2.2 million deaths at work happened every year. Safety issues recently are the major problems and concerns in the construction industry in developing countries. Many efforts have been made to address this problem, but the results have been far from satisfactory when the number of accidents in construction and in industry continued to increasingly dominate. For these reasons, Safety Management System (SMS) including safety audits, safety programs, safety planning and safety tools are reasonably developed and gradually improved.
Oil and gas industry is one of important businesses in many countries including Vietnam nowadays. Currently, with the economic growth of 7%, Vietnam placed in the third rank in the field of oil production among Association of South East Asian Nations countries, after Indonesia and Malaysia (URL1, Website of CNN). With this rate, Vietnam will become the world's 30th largest oil-producing nation in the world (Brown, 2005).
Consequently, a safety auditing in oil and gas project becomes more essential in view of preventing the increasing accidents. This is the new topic which can support the management system and enhancement of effective SMS in the oil and gas industry. Occupational safety and health in Vietnam has been a serious issue for many years. The number of deaths is continuously increasing, while the number of accident is still too high compared with other counties in the world. (Website of Department of Occupational Safety, 2006 and Vietnamese Government Reports of Ministry of Labors)
Especially, construction field always takes the major percent in the number of accidents, death and severe injuries. At present, safety regulation and enforcement in Vietnam is still not adequate. Safety research, in addition, has not been extensively conducted. Lam (2004) and Van (2002) mentioned that the safety management system has not been properly implemented while safety researches are limited. In some countries, although SMS has been applied, the accident rate is still high. Through the use of Safety Audit System, Rowlinson and Lam (2006) revealed the strengths and weaknesses of SMS. The importance of safety audit is noted as followed:
Traditional approaches to benchmarking risk management and safe work performance with incident rate reduction have failed to provide a strong connection between program causes and direct factors influencing risk and loss frequency, Huang and Brubaker (2006). Workplace Audits are shown to be a common form of measuring an organization’s safety performance. Beside, safety auditing is not only the process in determining the ultimate value of an overall safety program, but also the activities examined those that will have the greatest impact.
Mr. Phan Thanh Hai made a case study which main objective was to identify the Safety Management System Practices and Safety Audit Processes and Factors in Vietnam Oil and Gas Construction Project and proposed some recommendations for the improvements of the studied system.
He found out that in construction field of Oil and Gas industry, the Safety Management System has still faced with many problems, and audit safety is using to solve these issues and improve the system. By the measurement method, Organizations or Companies are able to do business each other in their belief, safety and prestige. This auditing approach is also a better method than inspection.
However, the Safety Auditing System is new and strange in construction projects, so it still reveals some weaknesses and limitations. These pitfalls are what an effective auditing method is, how to use auditing tools, and how to make the effective checklist.
During his data collection, he intended to conduct his study with five companies with five identified projects, but there were only three Companies who participated and five of their projects were permitted to be studied. Luckily, ten people were able to arrange their time to join the studied interview in order to get the overview of SMS. However, at least, these situations satisfied his requirement.
His conclusions are elaborated below.
1. Safety management system – these practices are identified in the five projects. The studied methods were the observation, the documentation review and the interviews. The author got the overall of SMS (include Safety Auditing System). Besides, the expert interviews strengthened this awareness. Finally, SMS of the five projects might be clearly known before the safety auditing was studied.
2. Safety auditing process practice – this is the most important objective of this study. The auditing process was also identified by Observation, Documentation, Interviews, and especially Checklists. The Checklist was formed by necessary activities of the SMS audit. The auditor could use many auditing skills to compile, use and evaluate SMS. The request of auditing was that marking and comments had to fill a majority of Checklist’s activities during the audit.
To end the audit, a re-auditing was suggested to implement after the follow-up had given out. It was operated whenever the previous auditing had taken note of unmeasured activities. With five types of Safety Auditing Process, the common process had ever been practiced followed six stages such as 1) Audit Team; 2)Prepare; 3) Implementation; 4) Analysis and report; 5) Follow – up; and 6) Re-audit
3. Safety management system improvements - the Safety Management System Evaluation is found out at the last step of this Study. Five Projects and seven parts of their SMS are evaluated by the audit activities of Projects. It revealed that some international projects have more audit activities than domestic project. And two parts Leadership & Administration and Follow-up System are concerned more than others, whereas two parts Training and Implementation are not concerned properly in oil and gas projects.
According the result of Mr. Hai’s study, activities of part leadership and administration and part follow-up are important of Safety Audit System. They were listed in the Checklist more frequently than that of others. That means they were checked in all studies projects. Activities of part leadership and administration are considered as a necessary part of the Safety Management System.
Besides, the part follow-up also has more activities. They are useful to the audit in order to determine follow-up activities of many emergencies which are particular in the oil and gas construction projects, such as fire case, explosion case, on-site accident case etc. So, the audit has more activities of this part in the checklist.
Finally, during the audit, the auditor was responsible for checking many activities. Among them, activities of leadership, administration and follow-up are the most necessarily important. These parts are the target to reduce accidents in oil and gas construction projects. For this reason, oil and gas construction projects should have a good Standard, effective administration and practical follow up systems.
His thesis abstract is copied and posted.
Abstract
Safety was not only a concern of many companies, but also an unavoidable problem of many projects in oil and gas industry which currently was the strongest industry in Vietnamese manufacture and business. Thus, Safety Management System (SMS) was gradually improved by many new management practices which one of them was the Safety Auditing System (SAS). This system could evaluate SMS or any other systems with a checklist which is actually a list of activities set up to support the audit planning. The checklist is also the auditing tool to estimate the Safety System with some key markings (NC, NA, YES and OBS). Therefore, the study objectives were set to identify SMS practices and find out processes of the safety audit in oil and gas construction projects. To meet these requirements, three companies and five projects were studied. Five SMSs were identified by observation, interview and documentation in order to get the overview. Five auditing processes were also studied to evaluate these current SMS. Finally, the result of the study was the common process which had been implemented and applied to evaluate SMS effectively. The more activities of the auditing Checklist which were marked with position key (YES), the better SMS was. Moreover, another result was comments of SMS practices in oil and gas construction projects. It can be noticed that SMS in international projects was better than others; and in the Safety Management System, Administration & Follow-up were concerned more than other parts in order to support fully all usual and emergency activities on the project sites.
Oil and gas industry is one of important businesses in many countries including Vietnam nowadays. Currently, with the economic growth of 7%, Vietnam placed in the third rank in the field of oil production among Association of South East Asian Nations countries, after Indonesia and Malaysia (URL1, Website of CNN). With this rate, Vietnam will become the world's 30th largest oil-producing nation in the world (Brown, 2005).
Consequently, a safety auditing in oil and gas project becomes more essential in view of preventing the increasing accidents. This is the new topic which can support the management system and enhancement of effective SMS in the oil and gas industry. Occupational safety and health in Vietnam has been a serious issue for many years. The number of deaths is continuously increasing, while the number of accident is still too high compared with other counties in the world. (Website of Department of Occupational Safety, 2006 and Vietnamese Government Reports of Ministry of Labors)
Especially, construction field always takes the major percent in the number of accidents, death and severe injuries. At present, safety regulation and enforcement in Vietnam is still not adequate. Safety research, in addition, has not been extensively conducted. Lam (2004) and Van (2002) mentioned that the safety management system has not been properly implemented while safety researches are limited. In some countries, although SMS has been applied, the accident rate is still high. Through the use of Safety Audit System, Rowlinson and Lam (2006) revealed the strengths and weaknesses of SMS. The importance of safety audit is noted as followed:
Traditional approaches to benchmarking risk management and safe work performance with incident rate reduction have failed to provide a strong connection between program causes and direct factors influencing risk and loss frequency, Huang and Brubaker (2006). Workplace Audits are shown to be a common form of measuring an organization’s safety performance. Beside, safety auditing is not only the process in determining the ultimate value of an overall safety program, but also the activities examined those that will have the greatest impact.
Mr. Phan Thanh Hai made a case study which main objective was to identify the Safety Management System Practices and Safety Audit Processes and Factors in Vietnam Oil and Gas Construction Project and proposed some recommendations for the improvements of the studied system.
He found out that in construction field of Oil and Gas industry, the Safety Management System has still faced with many problems, and audit safety is using to solve these issues and improve the system. By the measurement method, Organizations or Companies are able to do business each other in their belief, safety and prestige. This auditing approach is also a better method than inspection.
However, the Safety Auditing System is new and strange in construction projects, so it still reveals some weaknesses and limitations. These pitfalls are what an effective auditing method is, how to use auditing tools, and how to make the effective checklist.
During his data collection, he intended to conduct his study with five companies with five identified projects, but there were only three Companies who participated and five of their projects were permitted to be studied. Luckily, ten people were able to arrange their time to join the studied interview in order to get the overview of SMS. However, at least, these situations satisfied his requirement.
His conclusions are elaborated below.
1. Safety management system – these practices are identified in the five projects. The studied methods were the observation, the documentation review and the interviews. The author got the overall of SMS (include Safety Auditing System). Besides, the expert interviews strengthened this awareness. Finally, SMS of the five projects might be clearly known before the safety auditing was studied.
2. Safety auditing process practice – this is the most important objective of this study. The auditing process was also identified by Observation, Documentation, Interviews, and especially Checklists. The Checklist was formed by necessary activities of the SMS audit. The auditor could use many auditing skills to compile, use and evaluate SMS. The request of auditing was that marking and comments had to fill a majority of Checklist’s activities during the audit.
To end the audit, a re-auditing was suggested to implement after the follow-up had given out. It was operated whenever the previous auditing had taken note of unmeasured activities. With five types of Safety Auditing Process, the common process had ever been practiced followed six stages such as 1) Audit Team; 2)Prepare; 3) Implementation; 4) Analysis and report; 5) Follow – up; and 6) Re-audit
3. Safety management system improvements - the Safety Management System Evaluation is found out at the last step of this Study. Five Projects and seven parts of their SMS are evaluated by the audit activities of Projects. It revealed that some international projects have more audit activities than domestic project. And two parts Leadership & Administration and Follow-up System are concerned more than others, whereas two parts Training and Implementation are not concerned properly in oil and gas projects.
According the result of Mr. Hai’s study, activities of part leadership and administration and part follow-up are important of Safety Audit System. They were listed in the Checklist more frequently than that of others. That means they were checked in all studies projects. Activities of part leadership and administration are considered as a necessary part of the Safety Management System.
Besides, the part follow-up also has more activities. They are useful to the audit in order to determine follow-up activities of many emergencies which are particular in the oil and gas construction projects, such as fire case, explosion case, on-site accident case etc. So, the audit has more activities of this part in the checklist.
Finally, during the audit, the auditor was responsible for checking many activities. Among them, activities of leadership, administration and follow-up are the most necessarily important. These parts are the target to reduce accidents in oil and gas construction projects. For this reason, oil and gas construction projects should have a good Standard, effective administration and practical follow up systems.
His thesis abstract is copied and posted.
Abstract
Safety was not only a concern of many companies, but also an unavoidable problem of many projects in oil and gas industry which currently was the strongest industry in Vietnamese manufacture and business. Thus, Safety Management System (SMS) was gradually improved by many new management practices which one of them was the Safety Auditing System (SAS). This system could evaluate SMS or any other systems with a checklist which is actually a list of activities set up to support the audit planning. The checklist is also the auditing tool to estimate the Safety System with some key markings (NC, NA, YES and OBS). Therefore, the study objectives were set to identify SMS practices and find out processes of the safety audit in oil and gas construction projects. To meet these requirements, three companies and five projects were studied. Five SMSs were identified by observation, interview and documentation in order to get the overview. Five auditing processes were also studied to evaluate these current SMS. Finally, the result of the study was the common process which had been implemented and applied to evaluate SMS effectively. The more activities of the auditing Checklist which were marked with position key (YES), the better SMS was. Moreover, another result was comments of SMS practices in oil and gas construction projects. It can be noticed that SMS in international projects was better than others; and in the Safety Management System, Administration & Follow-up were concerned more than other parts in order to support fully all usual and emergency activities on the project sites.
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