Aspects to be Adressed Process Safety Management Implementation in the Mining and Metal Industry

Vale is a Brazilian mining company that exports more than 300 million tonnes of iron ore annually in long-haul ocean voyages to Asia and Europe. This operation makes Vale one of the world's largest charterers of maritime transportation in terms of tonnes x miles sailed. Its complex and peculiar maritime transportation system comprise more than 1500 shipments per year in around 900 different ships under different contracts:

• very large ore carriers operating under long-term contracts of affreightments
• medium and large bulk carriers charter under spot voyage contracts
• vessels nominated by clients

The totality of these vessels belongs to third-party shipowners responsible for each ship's operation and maintenance, being Vale only the beneficiary of the ore transportation from its ports in Brasil to destination ports around the globe. At first, it is not obvious to understand how effectively it is possible to prevent and mitigate accidents on vessels beyond one’s control.

Aligned with our commitment with safety and risk management and our ambition to be a benchmark in safety, Vale has engaged DNV on a project to support the assessment of its risks related to maritime transportation. The study aimed to evaluate the risk scenarios of Vale's Shipping operations, propose new controls, and create a specific Risk Management Model for the department.

DNV is a global independent assurance and risk management company, leading shipping classification society with improving safety as a core focus for different industries, including offshore and chemical industries.

This paper intends to present this work's methodology, assessment, and recent findings.

Methodology:

The first step was to evaluate the current risk matrix and identify if there were potential new risks to be added. After that, Hazard Identification Workshops (HAZIDs) were carried out with multidisciplinary teams from both companies to technically assess the impacts of the events (based on Vale's Risk Assessment Standard). The multidisciplinary team was comprised of risk operation, engineering, nautical, ports, environment, human rights, legal, external affairs, communication, and others.

The HAZID phase identified that two kinds of incidents were possible: (i) the ones where Vale has no direct responsibility for the root causes and (ii) the ones where Vale could be directly responsible.

For the first kind (i), it was concluded that shipping is a very regulated industry. Multiple agents have established rules and procedures over almost three centuries to guarantee the safety of life at sea, the maritime environment preservation, and the integrity of the assets. These agents included classification societies (such as DNV), flag and maritime authorities, and insurers. A qualitative approach to the probability of the events was established, based on the central assumption that by performing a documental verification of the vessels in the ship acceptance process (vetting), Vale was inheriting the residual risk of the very regulated shipping industry.

For the last one (ii), it was identified that Vale had much more physical control than the industry's average. Therefore, for the risk events that Vale could cause, the additional controls provided another level of safety and reduced the probability of the event.

Different industry accident databases (IMO, Intercargo, Lloyd's List, etc.) were assessed to understand the probabilities of a risk event taking place based on the industry's overall incidents in the last ten years.

During the HAZID phase, the financial impact was evaluated based on 14 relevant historic shipping accidents used as reference. They were dissected so it could be possible to understand in detail the financial impacts typically involved in these scenarios.

The study's second phase started with a statistical analysis of incidents related to vessels that operated on Vale trade during the past ten years. It was observed that Vale's statistics for most of the risks were slightly better than the industry, however, without significantly changing the order of magnitude (except "Contact").

After thoroughly understanding the inherent and residual scenarios of Vale's Shipping Department risks, the focus was directed on how additional controls could impact positively the risks. Considering that the environmental impact was a significant factor in the criticality of the risk, an oil spill response control was studied and it’s under implementation.

A Gap Analysis study was also developed, comparing Vale's existing controls and the industry's and regulations' best practices. The idea behind it was to understand what critical safety elements the company already controls and what it could do (and how) to achieve the subsequent Risk Management and Prevention level, thus contributing to safer navigation.

To record the progress and help define the next priority of actions, a tool to monitor the incidents statistically on Vale's chartered fleet was developed and implemented on the same platform where shipping operations and chartering analysts match cargo orders with chartered orders vessels.

Conclusion:

In summary, the main outcomes of the project were: (i) conclusion that Vale’s chartered vessels have a slight lower incident ratio but with same order of magnitude when compared to the industry’s average; (ii) proposition of new preventive and mitigatory controls based on risk priorities; (iii) implementation of a tool to monitor statistically the incidents on Vale’s chartered fleet; (iv) development of a Gap Analysis study between Vale’s controls and the industry’s and regulations’ best practices and; (v) determination of a specific Risk Management Model for Vale’s Shipping Department.