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VPP Programs Profit Sharing Motivates Employees and Management to Improve both Safety and Health and Environmental Safety at DynMcDermott Petroleum


Background:


DynMcDermott Petroleum Operations Company (DM) is a synergetic corporation formed by four private companies: DynCorp, based in Reston, Virginia which was later bought by Computer Sciences Corporation (CSC) in 2003; International Matex Tank and Terminals (IMTT) located in New Orleans, Louisiana; McDermott International located in Houston, TX; and Jacobs Engineering with Offices in Baton Rouge, Louisiana and Houston, Texas. DM was created to provide operating services and management to the U.S. Department of Energy (DOE) on the Strategic Petroleum Reserve (SPR) project. The SPR was established by the Energy Policy and Conservation Act of 1975 as a result of the 1973 Arab oil embargo.

In 1999, DM began the application process for approval into OSHAs Voluntary Protection Programs (VPP). DM viewed achieving VPP as a means for attaining a competitive advantage in the oil and gas industry, developing a superior safety and health management system (SHMS), and showing how a focus on environmental safety could be the driving force behind achieving exemplary safety and health. DM also set goals of increasing employee involvement and morale to improve overall company performance. In 2000, three DM sites achieved VPP Star level status, and another DM site achieved VPP Star level status in April 2001 (all have since been renewed).

Success Impact:

DynMcDermott Consistently Reports Days Away, Restricted or Transferred (DART) Rate and Total Case Incident Rate (TCIR) Well Below BLS National Average

Since 2001, DMs injury and illness rates have consistently been below the Bureau of Labor Statistics (BLS) national average for this industry. The companys Total Case Incident Rate (TCIR) three-year average between 2001 and 2003 was 1.49 which was 81 percent below the 2004 BLS 2004 national average. The companys three-year average Days Away, Restricted or Transferred (DART) rate between 2001 and 2003 was 0.44 which was 92 percent below the 2004 BLS national average.

The companys TCIR three-year average between 2004 and 2006 was 1.13 (lower than their previous three-year average) which was 83 percent below the 2005 BLS national average. The companys three-year average DART rate for this timeframe was 0.67 which was 86 percent below the 2005 BLS national average. The below table presents DMs TCIR and DART rates beginning in 2001 through 2006.

DynMcDermott Decreases Workers Compensation Costs and Shares Profits with Employees

DM believes that not only is having an effective SHMS the right thing to do in terms of protecting the safety and health of its employees, but it is also the companys best financial policy. Since 1999, when the company began its process towards achieving VPP approval and recognition, its workers compensation costs have decreased 96 percent. These savings are not only reflected in terms of overall profitability for the company, but are also shared with employees. These profits are shared with employees who remain vigilant in pursuing safety and health at work in the form of performance bonuses.
 
Year TCIR DART
2001 1.14 0.33
2002 1.70 0.52
2003
199
1.62 0.46
DMs 3-Year Average 1.49 0.44
BLS National Average (2004) 7.8 5.5
Year TCIR DART
2004 1.17 0.59
2005 1.19 0.39
2006
199
1.02 1.02
DMs 3-Year Average 1.13 0.67
BLS National Average (2005) 6.6  4.7

Origin:
Region VI, Baton Rouge Area Office

Entered VPP: In 2000, three DM sites achieved VPP Star Status; in 2001, one site April achieved VPP Star Status (all have since been renewed)

Industry: Oil and Gas (NAICS Code 324110)

Employer: 1

Employees: 554

Source and Date: Region VI, Baton Rouge Area Office (April 2007)

DynMcDermott Petroleum Operations Company celebrates after receiving OSHA VPP Star status
DynMcDermott Petroleum Operations Company celebrates after receiving OSHA VPP Star status

Workers at DynMcDermott Petroleum Operations Company wearing Personal Protective Equipment (PPE)
Workers at DynMcDermott Petroleum Operations Company wearing Personal Protective Equipment (PPE)