Paying the cost of safety oversight, protection

Ashley Fitzpatrick
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Publicly funded operations give window into occupational health and safety

Part 3 in a four-part series
Cost is often dismissed as not being a factor in occupational health and safety-related decisions. Even so, money for new equipment to protect workers or funding for the province’s regulators is not always a given just because safety issues are identified.

Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) president and CEO Scott Tessier sits beside then-Natural Resources Minister Tom Marshall on one of his first days on the job, taking in speeches at the start of Oil and Gas Week at the Marine Institute. Marshall decided on a ‘status quo’ budget for the regulator this year. — TC Media file photo

The Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB), for example, has been kept at “status quo” funding from government this year, despite an increasing number of workers offshore and exponential growth in the workload for staff at the board.

“A projected total of over 2,500 individuals will be working on production facilities, drilling units and vessels in the offshore area (in 2012-13); a 100 per cent increase from the average number of steady state ‘persons on board,’” remarked then-CEO Max Ruelokke, in a January 2013 letter pitching for an increase in the CNLOPB’s annual budget.

“Activity in the Newfoundland and Labrador offshore for (this year) is expected to be about 30 per cent higher than in 2012-13,” he stated.

The letter was sent to the provincial and federal ministers of Natural Resources and obtained by The Telegram through an access to information request, along with other communications from 2013.

In order to remain competitive with salaries and provide the staff needed to gather information for key decisions, including decisions on health and safety, the CNLOPB asked government for an operating budget of $15.3 million, up by about $1.5 million from the year before.

The board’s budget is contributed to equally by the provincial and federal governments, meaning the request amounted to an ask of about $750,000 from each.


“In conjunction with my federal colleague, the Hon. Joe Oliver, we have completed our review of the CNLOPB’s 2013-14 budget and business plan,” stated then-minister of Natural Resources Tom Marshall, in an April response to Ruelokke’s letter.

“The CNLOPB had requested a significant increase of $1.5 million from the 2012-13 budget, however, any increase could not be considered given our current fiscal challenges.”

The offshore industry showed improvements in measurable safety performance indicators in the last fiscal year.

“The Newfoundland and Labrador offshore workforce had a reportable injury frequency rate of 4.60 per million hours worked in in 2012-13 (there were 24 reportable injuries or illnesses with 5,215,799 hours worked), a decrease from the 2011-12 rate of 5.34 per million hours worked,” noted Scott Tessier, current chair and CEO of the CNLOPB, in his own letter to both ministers in June.

However, Tessier added, “(the year) saw a marked increase in the regulatory workload for the board with 284 regulatory review, licensing, auditing and approval activities, as compared to 121 in 2011-12.”

In responding, Marshall did not address the potential effect of such an increased workload.

“This increase in activity should bode well for increased productivity from our offshore in the years to come,” he stated, going on to note safety and the environment as continuing to be key priorities for government.

Contacted about this year’s budget, a spokesman for the offshore regulator provided the following statement: “The board has been able to find efficiencies within its administrative and support functions this year in order to continue to exercise our core regulatory oversight in the areas of worker safety, environmental protection, resource management and industrial benefits.”


In addition to oil and mining work, Newfoundland and Labrador is in the midst of a multibillion-dollar upgrade to its electrical systems. There is the Lower Churchill project, but also hundreds of millions of dollars in yearly capital works, for upgrades to 30- and 40-year-old power lines and power plants, by Newfoundland and Labrador Hydro.

Some of the smaller projects proposed revolve specifically around safety issues.

For example, Newfoundland and Labrador Hydro received a recommendation for fire protection upgrades at the Holyrood power plant five years ago, from its insurer FM Global. Meeting or not meeting the recommendation would not affect Hydro’s insurance premiums.

According to a report filed by FM Global, the work at the oil-burning plant would be a good idea from a health and safety perspective.

In its most recent capital budget filing with the Public Utilities Board (PUB), the utility has proposed to go ahead with the upgrades, at a cost of $369,100. If approved by the PUB, the work is expected to be finished by 2015 — seven years after the initial recommendation.

About two years after the expected completion, the power plant is to be repurposed, with oil deliveries disappearing and the risk of a devastating fire greatly reduced, as power from Muskrat Falls comes online.

At this point, Hydro is being challenged before the PUB on its plan for the fire safety upgrades. The utility’s industrial customers have argued the utility showed little interest in spending the money on the protections before now.

Asked about the issue, a spokeswoman for Hydro stated FM Global recommendations have been part of Hydro’s budgeting for several years, with other items covered off.

“Through our ongoing planning process, Hydro continually evaluates the condition of assets to determine the right time to make capital investments that will ensure reliability and safety, while keeping operating costs down,” stated the emailed response to questions this week.

Meanwhile, in the midst of the back-and-forth debate over the Muskrat Falls hydroelectric development, few people may have marked the improving safety record of Nalcor Energy and its subsidiaries, including Newfoundland and Labrador Hydro.

That said, even in the midst of the strongest safety culture, safe practices can fall to the wayside.

In one such case, Hydro has stated it plans to buy eight pole trailers, for use in safely moving around utility poles in isolated communities.

“Currently there is no appropriate equipment to move poles, hence the line crews are using whatever means is available to them in the community, such as dragging them with a chain behind a vehicle or using a backhoe to carry them. These are unsafe practices which should be discontinued,” the utility’s management stated in a filing to the regulator.

The utility did not state why having a safe means of transporting poles was not required in the same communities when it was buying trailers from 2009-2013. Four trailers were purchased by Hydro in that time period.

When asked this week, a spokeswoman stated the trailers were not purchased because the existing practice for moving poles around remote communities was accepted.

Tomorrow: Part 4 of The Telegram’s series looking at OHS issues — on the follow-up to workplace accidents.

Organizations: Canada-Newfoundland and Labrador Offshore Petroleum Board, Part 4 of The Telegram, Newfoundland and Labrador Hydro FM Global Public Utilities Board Nalcor Energy

Geographic location: Newfoundland and Labrador, June.However, Muskrat Falls Holyrood

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Recent comments

  • Dolf
    November 07, 2013 - 14:54

    The late-great basedball pitcher/broadcaster Dizzy Dean murdered the English language. Referring to the portly Don Zimmer one time he opined: "It looks like my friend is eatin' off the highest part of the hog". Hmmmmm.