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Editor's Letter

Urgent!
Examine and Re-Evaluate Safety Culture and Processes

The boards of directors and executives of oil and chemical companies throughout
the world are being asked to re-examine their safety cultures to determine if they
are sufficiently investing in the people, procedures, and equipment necessary to make
their workplaces safe from catastrophic accidents.

The request comes from the U.S. Chemical Safety and Hazard Investigation Board
(CSB), which sees an opportunity for review and reform on a worldwide scale in
the wake of last month’s release of the “Report of the BP U.S. Refineries Independent
Safety Review Panel.”

An independent federal agency charged with investigating industrial chemical accidents,
the CSB looks into all aspects of chemical accidents, including physical
causes such as equipment failure as well as inadequacies in safety regulations, standards,
and management systems. Its request for review is based on findings that
significant process safety culture issues exist at BP refineries, saying that even
though it had improved its personal injury rate before the Texas City explosion that
killed 15 in March 2005, BP has material process safety deficiencies at all five of its
U.S. refineries.

While chastising BP for its safety deficiencies, the CSB is commending the BP Re-
fineries Independent Safety Review Panel, chaired by former Secretary of State James
A. Baker III, for its diligence in producing a comprehensive report on BP’s safety
management and culture.

The panel was formed in response to the CSB’s urgent recommendation of August
2005 after two subsequent incidents put employees and the surrounding community
of BP’s Texas City refinery in further danger.

Just three months after the fatal explosion in March, the Texas City refinery experienced
a serious hydrogen fire in its resid hydrotreater unit that caused $30 million
in property damage and forced residents to take shelter. Two weeks later,
another incident related to mechanical integrity in the refinery’s gas oil hydrotreater
forced another community shelter-in-place alert. This series of events prompted the
CSB to issue its first-ever, urgent safety recommendation, calling on BP to convene
an independent panel to assess safety culture and oversight at all five of its
North American refineries.

The report released last month includes specific and extensive recommendations
(see page 6) to improve BP’s corporate safety oversight, corporate safety
culture, and corporate and site process safety management systems relating to its
five U.S. refineries.

The report demonstrates that the “serious concerns” the CSB voiced in August
2005 about BP’s safety practices — in the early phases of the accident investigation
— were indeed justified. There is no doubt that the issues of safety culture and safety
management identified in this report are serious and warrant immediate action by
BP, its executives, and its board of directors.

However, Secretary Baker said the panel is “under no illusion that the deficiencies
we have identified are unique to BP. If other refining and chemical companies consider
our recommendations and apply them, we believe that those workplaces will be
safer and that future tragedies like the Texas City accident can be avoided.”

Corporate leadership at the highest level is accountable for the safe operation of
facilities that use hazardous chemicals. Safety culture is created at the top, and
when it fails there, it fails workers far down the line. That is what happened at BP,
said the CSB.

After it’s had the opportunity to review the panel’s report in detail, the CSB anticipates
it will vote on closing the August 2005 urgent safety recommendation. The
CSB’s final report on the root causes of the March 2005 explosion is in the final
drafting stages and is expected to be released on March 20, 2007, at a public meeting
in Texas City. It will propose recommendations at the national level to prevent
similar tragedies in the future.

It should make for interesting reading, and should be mandatory for the operators
of all oil and chemical processing plants.

Thanks and good luck.

Valtronics

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