chemical plant and clouds
Insight

What does 2021 hold for the Process Industries?

Julian Hought Director UK Process Industries Sector
Julian Hought

Julian  is a chartered engineer with over 28 years’ experience in the chemical industry. He has an established track record covering research and management of engineering and regulatory compliance functions on high hazard manufacturing sites. Much of his experience spans safety in design, construction, commissioning, operation, maintenance, modification and decommissioning of process plant within the chemicals, pharmaceuticals, oil & gas, energy and general manufacturing industries.

2020 was an unprecedented year that brought with it lots of uncertainty and change across the world, not only in relation to the COVID-19 pandemic, but also with the Brexit transition period ending on 31 December 2020. As we move further into 2021, we are exploring some of the key themes we expect to see throughout the year in the Process Industries.

UK Health and Safety Executive (HSE) Priorities

The COVID-19 pandemic and lockdown restrictions has meant that the HSE’s attention has predominantly been focused on inspections related to Coronavirus and ensuring workplaces meet the required health and safety standards. There is an expectation that there will be ongoing disruption to ‘normal operations’ into 2021 and so interventions will likely be conducted as virtual exercises, on site or as part of a blended approach, as required.

Whilst we wait for the full details of the HSE’s 2021 strategy to be published, some of the key themes from the 2019/2020 Business Plan that will continue to be of importance this year include:

  • Reduce the likelihood of low frequency, high-impact catastrophic incidents

There is a need to provide assurance that duty holders are identifying and managing major hazard risks and so targeted inspections will take place to test duty holders’ risk management systems. Appropriate and proportionate risk assessments should be completed to highlight critical control measures and suitable procedures should be in place to ensure they remain effective.

  • Strengthen major hazard leadership and worker engagement

There is a priority to promote effective leadership across high hazard industries and to gain commitments to sustained improvements, so that ownership of risks is taken by those with the responsibility to reduce them. This is not new and in response we have developed a series of integrated process safety qualifications within the UK’s national regulated framework. They provide senior and middle managers, and those with more general responsibilities for process safety, with a wider understanding of the subject to help them to effectively manage process safety programmes and teams in accordance with industry recognised good practice guidance.

  • Drive duty holders to reduce the risk of offshore hydrocarbon releases

Although minor leaks have been almost eliminated, major releases still occur. The HSE continues work to secure a greater focus by operators to improve safety leadership.

  • Raise operators’ focus on cyber security to ensure appropriate protection against major incidents

The National Cyber Security Centre has indicated threat levels to cyber security within the UK’s major hazard industries are increasing. Greater integration of IT and industrial automation and control systems requires more to be done to prevent cyber attacks. Currently, there is a weak alignment between the strategies employed by industry and their major accident hazard scenarios. The HSE has conducted trial inspections of COMAH Establishments and operational guidance (OG86) has been drawn up and issued.  Operators of COMAH Establishments (lower and upper tier alike) are expected to be in the process of developing cyber-risk management systems and embarking upon cyber security risk assessments.

Increased risks of flooding

Flooding is the most common and widespread natural disaster in the UK, and a number of major hazard sites have been badly affected over the years. Most recently, Storm Christoph showed us how widespread destruction can impact local communities and businesses from flooding events. It’s not surprising that the COMAH Competent Authority expects plans to be in place at sites located in areas where potential flooding exists. COMAH sites vulnerable to flooding will need to undertake a range of assessments including carrying out topographical surveys to assess flood potential, flood Hazard and Operability (HAZOP) studies, specify appropriate and proportionate risk reduction measures and develop flood response plans and post flood recovery plans.

UK REACH

The UK REACH Regulation was brought into law on 1 January 2021. If your business is supplying or purchasing chemical substances, mixtures or articles to and from the EU, EEA, NI and/or Great Britain you must ensure that you meet the relevant duties under the UK and EU REACH Regulations.

There will continue to be adjustments to the new regulations throughout the course of this year with the impacts of additional costs, dealing with customs paperwork and border delays yet to be fully seen.

Training and Organisational Competence

The pandemic has brought about a shift in work dynamics and businesses have had to rethink how they operate, and the training function has been integral in helping to transition to a more remote workforce. Gaining a competitive advantage is a strategic priority for most businesses to strengthen their competitiveness and growth potential. One of the supporting measures to achieve this is through demand-led skills development. But while efforts to improve competency in the process industries are building, they are largely focussed on improving the technical knowhow of individuals, when what is also needed is a focus on organisational learning – to increase, disseminate and retain knowledge at every level within businesses, within a defined structure, to retain collective knowledge and promote succession planning.

At SLR we have and continue to work hard to support skills development in the high hazard industries, recognising not least that our own success as a service provider is tied to the success of the industry overall. Using established tools and techniques we help to map out training needs, put Competence Management Systems in place based on recognised good practice guidance, and deliver tailored training to meet individual and company needs, through a mix of accredited and regulated training programmes, to deliver measurable benefits in operational and safety performance.

Environmental, Social and Governance (ESG)

Corporations, private equity and investors are recognising that it is no longer only about how a company’s operations impact the environment, its people, and the communities in which it operates, but it’s also increasingly about how environmental, social and governance (ESG) issues can materially impact a company’s performance and ultimately, its value. Chemical companies around the world face increased risk arising from environmental exposure to waste, pollution and toxicity, and the global trend toward more rigorous environmental regulation increases this risk. ESG has rapidly evolved from a perceived nice-to-have proposition to a necessary focus area. SLR has been highly active in the ESG space for over 15 years and offers a package of ESG advisory services and we expect ESG to continue to be a key influence in the industry over the coming year.

For more information or to discuss a project, please get in touch.