Social Sustainability captures the areas of safety and employment within our industry. These areas have a huge impact not just on our industry’s performance today, but also on the sector’s legacy. It is therefore essential that all sectors of the industry and supply chain work towards:

• Improving business practices, promoting social responsibility and ensuring continued contribution to public finances.
• Investing in our employment capability and capacity, by attracting and retaining a skilled workforce against global competition, targeting the demographics of our industry and safeguarding the 100,000’s of jobs the industry provides in the UK.
• Improving our safety performance and installation integrity in order to eliminate all accidents, meeting our target of becoming the safest place to work in the global oil and gas industry by 2010.

The industry has worked hard to continually improve business practices and behaviours in order to promote and enhance aspects of social responsibility and business efficiency. Central to these activities has been the introduction of three voluntary codes of practice: the Infrastructure Code of Practice (ICoP), the Commercial Code of Practice (CCoP), and the Supply Chain Code of Practice (SCCoP). The CCoP sets out guidelines for streamlining commercial practices and behaviours, whereas the SCCoP is designed to help strengthen the United Kingdom Continental Shelf (UKCS) supply chain by improving performance, eliminating unnecessary costs, adding value and enhancing competitiveness. The ICoP relates to the CCoP and is designed to maximise the use of existing infrastructure.

Oil & Gas UK helps to promote social responsibility and good practices within the offshore oil and gas industry. Industry dialogue with external stakeholders, through the Offshore Forum and Atlantic Frontier Environment Forum, help issues to be raised and addressed. Oil & Gas UK members also regularly produce detailed social responsibility and sustainable development reports which are built upon the ethical, socially responsible operations and environmental stewardship of those operating in the UKCS.

The UK offshore oil and gas industry also makes significant contributions to public finances. In 2006 the industry contributed £22 billion to the UK economy’s ‘value added’ figure and in the financial period 2005–06, HM Treasury benefited from tax receipts of around £9.8 billion, followed by £9.1 billion in 2006-7.

To measure our employment capability and capacity and ensure we remain on target to meet industry goals, Oil & Gas UK analyses overall employment and has recently surveyed the demographics of the offshore sector. We also monitor the skills and training work which is ongoing across all areas of the industry and work closely with operators, contractors and the wider supply chain to ensure the industry continues to attract and retain a skilled workforce.

The work on employment capability and capacity is also showing some encouraging results, with 646 technicians recruited into the upstream technician apprenticeship scheme since 2001, and other skills and training programmes showing positive progress towards addressing shortages. Industry’s expenditure has sustained high employment in recent years and the industry currently supports 480,000 jobs throughout the UK. This includes 30,000 in oil and gas companies and major contractors and 260,000 in the wider supply chain.

Oil & Gas UK uses various measures to chart progress towards meeting our goals. For offshore health and safety performance, we measure Lost Time Injury Frequency (LTIF) to measure our performance on a global scale, and HSE accident statistics to measure our national and sector performance. Installation integrity is a necessary part of a safe and sustainable industry and, as a result, the industry measures significant, major and minor hydrocarbon releases from offshore oil and gas installations with the objective of maintaining the integrity of offshore infrastructure and improving safety performance. The industry is continually investigating additional measures which can provide a reliable means of assessing health and safety performance.

The combined efforts of the offshore oil and gas industry over the last 10 years have led to marked improvements in health and safety performance, with a 57% reduction of LTIF for the UK and a 67% reduction in over-3-day and major injury rates since 1997. Furthermore, work on improving asset integrity has led to a 50% reduction in total hydrocarbon releases since 1993.

However, challenges remain which companies within the sector must work together to address. The downward trend in LTIF has shown a worrying reversal over the past two years and, as a result, Step Change in Safety will be reviewing its vision and the work needed from all sections of the industry to meet our goal of the UK being the safest place to work in the global oil and gas industry by 2010. Oil & Gas UK will also be revising the measures used to chart safety performance, working with the industry, regulators and the supply chain to capture all relevant information and occurrences, not relying entirely on LTIF statistics, in order to present as clear a picture as possible of the industry’s health and safety performance. Installation integrity challenges include a need for the industry to continue the decline in minor hydrocarbon releases, to meet the 10% year on year target for reducing combined (major and significant) releases and to develop wider key performance indicators to track asset integrity.

The industry’s employment capability and capacity is threatened by skills shortages caused by demands placed by current high activity worldwide, as well as the ageing workforce in certain key occupations within the industry. Oil & Gas UK aims to consolidate the efforts being made to address these issues across the industry, working with operators, contractors and representatives from the wider supply chain.

This section of the report details our progress towards meeting our Social Sustainability goals and measures our performance in key areas.

Social Development Table