health, safety, 2013 hse annual report - amazon...
TRANSCRIPT
2 Baker Hughes Incorporated
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1: Corporate Social Responsibility . . . . . . . . 10
Section 2: Health and Wellness . . . . . . . . . . . . . . . . . 18
Section 3: Personal and Process Safety . . . . . . . . . . . 24
Section 4: Environmental Performance . . . . . . . . . . 34
Section 5: Driving Flawless Execution . . . . . . . . . . . . 50
Section 6: Recognition . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7: Looking Forward . . . . . . . . . . . . . . . . . . . . 66
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
32013 HSE Annual Report
At Baker Hughes, our goal is to make today, and every day, a
Perfect HSE Day . Simply put, this means no injuries, no accidents,
and no harm to the environment . We work to achieve this one
day at a time, by “taking care of each other .” And that means our
employees are looking out for their teammates at Baker Hughes,
our industry partners at jobsites and members of our communities .
4 Baker Hughes Incorporated
Executive Summary
Our goal is to make today, and every day,
a Perfect HSE Day, one without recordable
injury or illness, serious spill or release, and
serious motor vehicle accident across the
company. During 2013, we improved our
HSE performance in many areas, achieving
fewer employee injuries and vehicle
accidents, minimizing spill volumes, and
advancing our conservation of energy and
water. Our accomplishments were, however,
overshadowed by the loss of six of our
colleagues, which emphasizes that we cannot
lose our focus on mitigating life-critical risks.
HSE goal performance
We strive for flawless execution in our
operations and believe that we can achieve
365 perfect HSE days in a year. Our performance
metrics highlight that we are progressing, but
we still have more to do.
Table 1 Summary of results of 2013 HSE goals
Goal Target Result
Zero fatalities 0 6 work-related employee fatalities
10% Reduction in Total Recordable Incident Rate (TRIR)
<0.68 0.65 (14% reduction)
10% Reduction in Days Away from Work Case Rate (DAFWCR)
<0.19 0.17 (18% reduction)
15% Reduction in Short Service Employee (SSE) TRIR
<0.95 1.03 (8% reduction)
10% Reduction in Motor Vehicle Accident Rate (MVAR)
<0.32 0.34 (4% reduction)
Reduce resource use by 10%, targeting water, energy and associated greenhouse gas emissions
10% reduction 13% reduction
15% Reduction in spill volume 15% reduction 6% reduction
52013 HSE Annual Report
This report provides an overview of Baker Hughes health, safety,
environmental and social responsibility performance for 2013.
In each section, we provide an overview of the goals, associated
activities and achievements, and future direction to bring
continual improvement.
6 Baker Hughes Incorporated
During 2013, we emphasized our mission to
“Make Everyday a Perfect HSE Day”, along with
the following key HSE focus areas: nn Continue culture shift balancing personal
and process safetynn Use work activity analysis for
injury preventionnn Promote healthy and fit behaviorsnn Learn from high potential incidents,
near misses, and observationsnn Mitigate transportation safety risksnn Enhance resource conservationnn Promote customer and
community engagement
Corporate Social Responsibility
Our efforts in Corporate Social Responsibility
continue to be recognized. We achieved
top tier ranking in our industry sector in the
following sustainability performance indices:nn Dow Jones Sustainability Ranking – Leader
in the Energy Equipment and Services
sector of the World and North America
Sustainability Indicesnn Carbon Disclosure Project (CDP) – Leader in
the Energy Equipment and Services sectornn CR Magazine’s Best Corporate Citizens –
Highest-ranked oilfield service company in
the energy industry sectornn Bloomberg Environment, Social and
Governance Disclosure Index – Leader in
the energy sector
Executive Summary
72013 HSE Annual Report
We achieved these accolades through our
efforts to engage our employees, achieve
a culture of diversity and inclusion, and be
recognized as a great place to work. Our
employees around the world enjoy supporting
our communities in a range of social activities,
often in collaboration with our customers.
Health and wellness
Our long term health goal is to optimize the
health of our employees for a positive impact
to our business and the individual. Our health
program involves protecting worker health and
influencing our employees to manage their
personal health. With a robust occupational
health and hygiene program and informative
wellness communications, this year’s health
activities included exposure monitoring for
validation of engineering controls; increased
awareness of breast cancer with our pink drill
bits campaign; and supporting community
emergency response team learning centers.
Our efforts continue to elevate the
“H” in HSE.
Personal and process safety
In many areas of the world, Baker Hughes
teams were individually successful in achieving
365 Perfect HSE Days. Regrettably, we
experienced six work-related fatalities within
the first four months of 2013. To help eliminate
serious injuries and fatalities in the workplace,
our new “Life Rules!” program was developed.
Employees performed nearly 43,000 Stop Work
actions in 2013, a notable 60% increase from
the previous year. Safety performance improved
with a 14% reduction in Total Recordable
Incident Rate and an 18% reduction in Days
Away From Work Case Rate. Hand and back
Our award-winning facility in Shafter, California built to our sustainable building standards
8 Baker Hughes Incorporated
injuries continue to be the most frequent
body parts affected, making up 44% of the
recordable injuries.
Transportation performance improved
with a 4% reduction in our Motor Vehicle
Accident Rate. We achieved a 9% reduction
in the overall accident frequency (all severity
classifications) and a 5% decrease in
“preventable” accidents. The majority of our
vehicle accidents were due to excessive speed
for conditions, improper following distance,
poor driver awareness of surroundings and
inconsistent Journey Management practices.
These causes reflect the need for continued
training and strong oversight programs.
With a helicopter crash resulting in the loss
of two employees, we conducted a thorough
air-safety audit on helicopter providers under
direct contract and initiated the assessment
of more than one hundred helicopter service
operators used by our clients to transport our
employees to offshore or remote land locations.
We also began working with an international
aviation safety consultant to develop stronger
operational controls and tools to help us
mitigate the hazards of helicopter operations
for our employees.
Environmental performance
We continue to focus on energy efficiency
and water conservation to align with our
sustainability strategy and commitment to
manage the risks associated with climate
change. We achieved a 13% reduction in
our resource use, as measured by our use of
electricity, natural gas and water. Greenhouse
gas emissions from our activities were also
reduced, eliminating approximately 53,500
metric tons of CO2e. This success is the result
of integrating energy management standards
into our HSE management system and the
continued commitment of our employees to
protect the environment and the communities
where we work and live.
Spill performance improved from 2012,
with a 6% decrease in spill volume. With
proper chemical management practices and
effective spill response planning, most spills
are contained and all are cleaned up quickly,
with minimal and temporary environmental
impacts. We’ve directed our efforts on the
The Navigation team holds the record for the most Chairman’s HSE Excellence awards with 12 wins
Executive Summary
92013 HSE Annual Report
process-related causes of spills, enhancing
these elements in our reporting system and
emphasizing spill prevention practices.
Sustainability improvements in our products
and services continue with the expansion of our
Bifuel (dual fuel) fleets of hydraulic fracturing
units. These bifuel units can replace up to 70%
of the diesel fuel with natural gas, reducing
greenhouse gas emissions. At year end, we had
converted nearly 100 pumps in our hydraulic
fracturing fleet. Other advances include the
further development of environmentally
preferred chemicals and new technologies that
reduce the amount of freshwater required.
In 2013, environmental compliance costs were
USD 85 million, essentially flat year on year. We
spent about USD 7 million in capital projects to
improve energy efficiency and reserved
USD 34 million to address environmental
liabilities at 72 sites worldwide.
Driving flawless execution
We collaborate with our customers and industry
groups to address the HSE challenges presented
in our operations and align our internal
standards to reflect best practice. In 2013,
we obtained full global IADC accreditation
for our Competence Assurance Program. To
further drive consistency and conformance, we
migrated our HSES MS into the Baker Hughes
Operating System (BHOS) in order to provide
employees a centralized location for all HSE and
technical procedures. Bureau Veritas conducted
our first global headquarter ISO 14001 and
OHSAS 18001 audit, as part of our multisite
certification effort. During 2013, we had 70
facilities certified to ISO 14001 and 22 facilities
also certified to OHSAS 18001.
Recognition
In our annual HSE recognition program, we
presented top-performing teams with the
Chairman’s HSE Excellence Award. This year, we
also introduced two new awards–the President’s
Perfect HSE Day award, and the President’s
HSE Performance award—to recognize teams
that achieved 365 Perfect HSE Days. Entries
for these awards were received from across
the enterprise with winners coming from all of
our major business sectors. The 500-member
team at the Navigation Manufacturing facility
in Houston, Texas won the Chairman’s HSE
Excellence award for the twelfth time and has
achieved more than 12 million man-hours
without a Days Away From Work case. Our
employees have also been recognized externally
by our customers and industry groups for their
stellar HSE accomplishments.
Chairman and CEO, Martin Craighead presents the
Chairman’s HSE Excellence Award to Jeff Merritt, Plant
Director and Susan Bell, HSE Manager at Navigation
Manufacturing Facility, Houston, USA
10 Baker Hughes Incorporated
Corporate Social ResponsibilityIn 2013, Baker Hughes employees continued
efforts to ensure we provide a preferred
workplace, and to foster a culture of openness
and trust. In addition, employees supported
community improvement projects, and also
collaborated on HSE challenges with our
customers. As a result of our efforts, we were
recognized as leaders in the energy sector in a
number of investor rankings.
Investor corporate social
responsibility rankings
Baker Hughes participates in a number of
investor sustainability assessments as a way of
benchmarking our global citizenship. Most of
the surveys evaluate a broad range of business
areas such as energy and the environment,
governance and compliance, risk management,
employee relations, and human rights.
Our corporate social responsibility (CSR) efforts
were recognized by the following investment
and media institutions:nn Dow Jones Sustainability Index . For the
second year in a row, Baker Hughes was
announced as a world sustainability leader
on the 2013 Dow Jones Sustainability (DJSI)
World Index. And for the first time, we
were also listed on the DJSI North America
Index. Baker Hughes was named as the
industry leader in the Energy Equipment
and Services sector.nn Carbon Disclosure Project (CDP) . In
the area of energy efficiency and climate
change, we were the highest-ranked
oilfield service company in the Energy
Equipment and Services sector. CDP
performance results are used in many
investor sustainability analyses.
DID YOU KNOW?
The rise of investor-led initiatives such as CDP reflects the growing interest in socially responsible investment . CDP has 722 institutional investors representing USD 87 trillion in assets .
Section 1
112013 HSE Annual Report
Our commitment to being good corporate citizens is reflected in
the decisions and actions of our employees in the work we do
every day. We realize that we earn our license to operate by being
responsible members of the communities in which we live and
work. This involves considering not only the economic impacts of
our decisions, but also the environmental and social impacts, and
finding the right balance between people, planet, and profit.
12 Baker Hughes Incorporated
nn CR Magazine’s Best Corporate Citizens .
In their 2013 “Industry Sector Best
Corporate Citizens,” CR Magazine listed
Baker Hughes as the highest-ranking
service company in the Energy sector at
seventh place overall. The list is compiled
from publicly available data covering
seven categories: environment, climate
change, employee relations, human rights,
governance, finance, and philanthropy.nn Bloomberg Environment, Social and
Governance (ESG) Disclosure Index .
Over the last three years, our company has
consistently achieved significantly higher
Bloomberg ESG performance disclosure
scores as compared with other companies,
including oilfield service companies.
Our employees
At Baker Hughes, we rely on the knowledge
and commitment of our diverse workforce at all
levels of our organization to meet our business
goals and achieve profitable growth. We foster
a culture of proactive engagement where
employees are involved and enthusiastic about
their work and feel a strong connection to
the Company.
Diversity and Inclusion . We recognize that
by attracting, developing, and retaining a
diverse talent pool, our employees will make
better business decisions and the Company
will be a better partner with our stakeholders.
In addition, we believe in an inclusive culture
where everyone can excel regardless of gender,
age, nationality, or religion.
In early 2013, the North America Women’s
Resource Group (NA WRG) hosted its second
annual two-day summit. Nearly 450 employees
participated, including 100 executives and
managers and 175 WRG team members
connected remotely from 8 locations across
North America. The summit demonstrates
Baker Hughes gives students first-hand look at oil and gas careers
Corporate Social Responsibility
132013 HSE Annual Report
our commitment to our diversity and
inclusion initiatives through networking and
panel discussions on topics to facilitate the
recruitment, development, and retention of
women employees.
In August, the NA WRG sponsored a visit of
22 Houston-area high school students to our
drill bits facility in The Woodlands, Texas. The
students spent the day learning about careers in
the oil and gas industry. This event was part of
the Science, Technology, Engineering and Math
(STEM) program which encourages students to
pursue careers in these disciplines. Through its
support of STEM, Baker Hughes helps promote
technology degrees and a career in the oilfield
service industry.
Employee engagement . Each year, Baker
Hughes measures employee engagement,
job satisfaction, and commitment to the
Company and colleagues. Seventy-two percent
of our employees completed the confidential
survey in 2013 to relay what is working, and
where we can improve. Overall, employee
engagement levels remained positive and
higher than an external company benchmark
at an enterprise level. Areas of strength include
feeling a sense of accomplishment, teamwork
and positive environment, and understanding
expectations. Areas for further improvement
include development and career opportunities,
employee recognition, and actions taken to
effectively compete in a global market. Survey
results enabled group managers to establish
and implement 2014 action plans around these
strengths and vulnerabilities.
Three questions related to HSE were included in
the employee engagement survey. These were
among the top positive responses as follows:nn 92% of employees agreed “Every day, my
work group strives to create the Perfect
HSE Day with no injuries, spills or
driving accidents”nn 95% of employees agreed “Everyone in
this Company is responsible for reaching
our HSE goals”nn 89% of employees agreed “When an HSE
incident occurs, we determine the root
cause and implement solutions to
prevent reoccurrence”
DID YOU KNOW?
In the employee engagement survey, 74% of employees agreed Baker Hughes is a good place to work .
14 Baker Hughes Incorporated
Employee Ombuds . Baker Hughes ombuds
(o3) office is a progressive initiative that
was voluntarily established by executive
leadership and follows the ethical principles
established by the International Ombuds
Association. It provides employees a safe
and confidential place to obtain information,
discuss their concerns, and evaluate options.
The ombudsmen work with employees through
any job-related issue, from a minor annoyance
to a serious concern on policy or law. The o3
complements, but does not replace or compete
with, any other resource in the Company, such
as line management, human resources, HSE,
legal, or our ethics and compliance helpline.
The existence and use of the o3 further assures
that the Company’s core values are not merely
philosophical, but an integral part of how
we work. The o3 completed the first full year
of operation in 2013. Initially, the office was
established to serve employees in the U.S.,
and Trinidad and Tobago, and in October, was
expanded to support our employees in Canada.
Military Recruitment . In February, Martin
S. Craighead, President and Chief Executive
Officer, signed into effect a new military
recruitment program. This program allows us to
tap into a diverse, dedicated, and highly skilled
group of individuals that are transitioning from
military service to civilian life. Veterans bring
leadership, drive, dedication, discipline, and
loyalty to Baker Hughes. The goal is to fill 15%
of available positions in the U.S. with veterans.
Veteran’s resource groups will be an employee-
run resource open to all employees that are
passionate about advocating for veterans.
Resource group members will volunteer their
time supporting our veteran employees.
Martin Craighead states his commitment to the military
recruitment program at the Veterans Resource
Group (VRG) meeting
DID YOU KNOW?
More than 550 employees have reached out to the o3 . These employees represented all levels of the organization, all groups and product lines, and range from the newly hired to our long-tenured employees .
Corporate Social Responsibility
152013 HSE Annual Report
Supporting our communities
Baker Hughes strives to make a positive
community impact with charitable contributions
at corporate, region and geomarket levels. In
2013, Baker Hughes operating regions made
contributions of more than USD 8 million to
charities around the world. In addition, the
Baker Hughes Foundation contributed around
USD 3 million, primarily to organizations
that target improvements in social sectors
supporting education, health, youth, and
culture (Fig. 1).
Employees in Ghana renovate a local school for deaf children
Education / scholarships
Matching Gifts Program
United Way
Health
Children / youth
Culture / museums
Other grants
Figure 1. Baker Hughes Foundation charitable contributions 2013
16 Baker Hughes Incorporated
Baker Hughes employees have been active
in a wide range of social initiatives, such as
charitable events that promote sustainable
benefits to the enterprise.
For example, Baker Hughes won an award
from Ghana’s Western Region Chamber of
Commerce and Industry for active involvement
in the community. Projects include the
renovation of a local school for the deaf in
which employees repaired the school’s ceiling,
roof, and concrete floor, and painted several
classroom areas. Baker Hughes donated more
than 20 computers as well as equipment for
the sewing and woodworking classrooms.
The project gave employees the opportunity
DID YOU KNOW?
Following the devastation of Typhoon Haiyan in the Philippines, Baker Hughes employees in Southeast Asia raised funds that were matched by the Company . A total of USD 10,000 funded relief aid to those directly affected, along with 20 boxes of essential items provided by our employees in Kuala Lumpur .
More than 100 Baker Hughes interns volunteered at the Houston Food Bank
Corporate Social Responsibility
172013 HSE Annual Report
to socialize with children and teachers, and
better understand the needs of the region.
Other community projects in Ghana included
donating treated mosquito nets and awarding
scholarships to six female engineering students.
Each year, Baker Hughes holds a social event
with our Houston-based university interns,
and last summer, 111 interns volunteered at
the Houston Food Bank for a day, packing a
total of 31,928 pounds of food and 26,606
individual meals. “We wanted to do something
that would enable our university interns to
experience the community they were working
in,” said Cheryl Piccio, University Relations
Intern Program Team Lead. “We chose the
Food Bank because Baker Hughes has been a
strong supporter of the charity for many years.
The interns really enjoyed the event and it
made their summer internship more meaningful
because it allowed them to touch the lives of
our city’s needy.”
Collaborating with our customers
We also support our customer sustainability
objectives. For example, we opened the
Baker Hughes Petroleum Education Centre
at Universiti Teknologi PETRONAS (UTP) in
Malaysia last year. The new center at UTP
offers an interactive, hands-on approach to
education. It is part of our pledge to foster
education in Malaysia, working in partnership
with PETRONAS and three other oil and gas
companies. Baker Hughes also awarded four
scholarships to university students.
PETRONAS official Dato’ Wee Yiaw Hin (left) at the opening of the new Baker Hughes Education Center
18 Baker Hughes Incorporated
Health and Wellness
At Baker Hughes, the “H” in HSE means a
healthy employee. Healthy employees are
productive and make good decisions for our
company and our customers. The objective of
our Employee Health and Wellness program is to
optimize the health of Baker Hughes employees
to generate a positive impact on our business.
The components of the health program protect
worker health through occupational health and
hygiene, ensuring that the job assignment fits
the worker, and promoting personal health with
wellness support.
Wellness communications
Communicating health information continues
to be a vital part of our health program. Each
month, our medical director (MD) provides an
informative bulletin, the Monthly MD Message,
to all employees. The emphasis is on personal
wellness, protection and early detection of
disease. Our 2013 health topics included:
prostate cancer, breast health, back health,
exercise, stress, along with heat induced and
insect borne illnesses.
Occupational Health and Hygiene
Personal Health and Hygiene
• Work related• Protect worker health• Medical surveillance• Exposure assessment• Silica• Malaria
• Assignment related• Ensure worker health• Fit for duty• Drugs and alcohol
• Person related• Influence personal health
• MD messages• Health advisories• Health fairs
• Flu shots• Community outreach• Smoking cessation
Job Placement and Assignment
Employee Health and Wellness
Section 2
192013 HSE Annual Report
We believe that encouraging our employees to adopt healthy
behaviors at work and at home improves their quality of life. We
provide programs on occupational health and hygiene, fitness for
assignment and personal wellbeing. Healthy employees are more
productive, which also benefits our company and customers.
20 Baker Hughes Incorporated
Health advisories remain an important part
of our wellness communications. With topics
ranging from polio to measles and dengue
fever, these disease specific advisories guide our
employees and their families when frequencies
increase in their area, providing information
about symptoms, treatment, travel precautions,
and most importantly, means of protection.
Cultivating healthy employees requires
teamwork. To that end, Human Resources and
HSE partnered to create a stronger, consistent
message on wellness with “Wellness 360.”
Through this partnership, resources are focused
enterprise-wide on a single topic to enhance
the wellness message and coordinate health
promotion topics.
DID YOU KNOW?
Health advisories by the numbers:nn 62 issued in 2013nn 36 different countriesnn 21 different endemic diseases
The pink drill bit arrives for use in Mossell Bay, South Africa
Health and Wellness
212013 HSE Annual Report
In 2013, “Wellness 360” emphasized our
support of breast cancer awareness in both
men and women. On the first day of Breast
Cancer Awareness month, Baker Hughes held
a press conference in our booth at the Society
of Petroleum Engineers Annual Technical
Conference and Exhibition (SPE ATCE) in New
Orleans. More than 100 media representatives,
customers, and employees joined in the
celebration that included giveaways and pink-
inspired refreshments.
During the press conference, Derek Mathieson,
Vice President of Strategy and Corporate
Development, announced our USD 100,000
donation to the Susan G. Komen Foundation
and launched the “Doing our Bit for the Cure”
campaign. This campaign was designed to
spread awareness by painting and distributing
500 pink drill bits to customers around the
world. These drill bits also included the Susan
G. Komen ribbon logo. Everywhere, from the
rig floor to the customer’s office, operators and
Baker Hughes employees are starting to look
out for these pink bits and send back stories
and photos.
Occupational health and hygiene
Industrial hygiene efforts focus on the
anticipation, recognition, quantification, and
control of occupational exposures to vapors and
dusts. We continue to leverage our industrial
hygiene services by using external resources
while providing a standard data gathering and
reporting protocol, and by having our own
industrial hygienists work closely with our field
HSE representatives to provide expertise and
training. This year, we collected extensive data
on hazards such as chemicals, noise, and dust
particles to assure safe working conditions for
our employees, customers, and contractors.
Engineering controls were developed and
validated to reduce the potential exposure
to respirable crystalline silica on hydraulic
fracturing jobs. Such control measures can
reduce exposures through process changes,
with the goal of reducing personal protective
equipment requirements. Health professionals
worked hand in hand with Pressure Pumping
engineers to validate the effectiveness of
proposed engineering controls through
exposure monitoring. One area receiving special
attention was the equipment used to move sand
during hydraulic fracturing. Improved controls
under evaluation include adding a local exhaust
system to the sand mover; providing automated
control of the equipment, thus removing an
operator from the regulated area; and providing
discharge chutes and covers on the transfer belt
to the blender. All these engineering changes
effectively reduce worker exposure.
Hydraulic fracturing sand mover with internally designed
vacuum system
22 Baker Hughes Incorporated
Malaria
Our continuing emphasis on malaria reduction
has yielded results. Malaria cases were reduced
85 percent, from 12 cases in 2012 to two
in 2013. When travelling in regions where
malaria is present, our employees consult
with a travel medicine specialist about the
use of antimalarial medication. They also
obtain two kits, a Malaria Personal Protection
Kit and a Malaria Survival Kit from the local
Malaria Control Officer. The Malaria Personal
Protection Kit is effective in preventing bites
from malaria-infected mosquitoes, as well as
from mosquitoes infected with other diseases,
including West Nile Virus, Dengue Fever, and
Yellow Fever.
Health incidents
Despite best efforts, Baker Hughes experienced
a number of workplace-related illnesses. Of
the 125 health-related incidents reported,
48 percent were related to chemical exposure,
24 percent were from insect bites, and
21 percent were from heat stress. Chemical-
related incidents continue to be a contributor to
worker illness. Our health program emphasizes
the prevention of spills, personal protective
equipment, and awareness to potential
exposures. Prevention of our other top health
risks, such as insect bites and heat stress, are
covered in our monthly health messages.
Industrial hygiene internships
Our industrial hygiene interns such as Joseph “Jay”
Prescott benefit from the practical experience of
participating in engineering/industrial hygiene
projects. As one of ten interns hosted over the
past five years, Jay actively participated in this
year’s evaluation of engineering controls for
hydraulic fracturing activities. Other projects took
him to a drilling fluids location and several bulk
cement plants in the southwest to evaluate worker
exposure to dust and noise. He also monitored welding fumes, metal working fluids,
paints and biocides at various locations, including well sites. The data he provided on
our acrolein based biocide not only provided information to verify work practices, it also
produced key information for a health hazard profile to share with customers.
Jay Prescott, Industrial Hygiene Intern
2013 Health-related categories
Chemical 48%
Insect bites 24%
Heat stress 21%
Other 7%
Health and Wellness
232013 HSE Annual Report
Emergency response
Emergency response planning continues to
play a critical role in our Employee Health
and Wellness program across our operations
globally, as demonstrated in the photograph of
hands-on training in Latin America. In Houston,
Texas, Baker Hughes has partnered with the
Harris County Emergency Corps. to improve
training capabilities for local emergency
response teams. A donation of USD100,000
has enabled the emergency corps to add several
training rooms, a computer laboratory, and two
simulator rooms, and also to add personnel to
train 300 people annually.
We continue to promote wellness, prevent
disease, and evaluate and reduce exposures to
chemical, physical and biological agents that
can affect health. The Wellness objective for
2014 includes promoting health stations to
provide a central facility location for fitness and
nutrition information. These stations will also
allow employees to monitor their own personal
metrics like weight, body mass index and
blood pressure. In 2014, efforts will continue
to reduce exposure and improve engineering
controls to protect worker health.
DID YOU KNOW?
Reducing sedentary behaviors by sitting less and moving more can improve your health . Active ideas:
nn Have “walking” conversations versus sittingnn Take family walks after dinnernn Track your steps and aim for 10,000 steps a daynn Stand up and move after 30 minutes of sitting
Emergency response training - photo courtesy of Harris
County Emergency Corps
Employees practicing medical emergency procedures in
Santa Cruz de la Sierra, Bolivia
24 Baker Hughes Incorporated
Personal and Process SafetyAt Baker Hughes, our goal is to make today,
and every day, a Perfect HSE Day – that is,
a day with no injuries, no accidents, and no
harm to the environment – worldwide. The
Perfect HSE Day initiative was developed and
launched in 2013 to simplify and personalize
HSE performance for our nearly 60,000
employees. During the year, more than 60
local teams achieved 365 Perfect HSE Days,
comprising nearly 7,500 employees, or 9% of
our workforce. As a company, we achieved one
month of Perfect HSE Days.
However, we tragically lost six of our fellow
employees in the first four months of the
year in work-related accidents. Transportation
accidents resulted in four of the six losses
and remains one of our highest risk activities.
Two losses were the result of a single vehicle
accident and two others were from a fatal
helicopter crash. The final two fatalities were
the result of a dropped-object incident and an
electrocution. To help eliminate serious injuries
and fatalities in the workplace, Baker Hughes
highlights “Life Rules!” which are a formal set
of rules related to life critical hazards. There are
ten Life Rules, each with a corresponding icon
to help employees quickly identify the hazard.
Stop Work
Stop Work authority is a proactive measure
that employees can deploy to prevent incidents
whenever they have concerns about inadequate
control of HSE risks. In 2013, we elevated
Stop Work beyond an expectation of our
employees; it became a personal obligation
and responsibility. Employees performed nearly
43,000 Stop Work actions, an increase of 60%
from the previous year and more than twice
the number from two years ago (Fig. 1). This
demonstrates that employees are increasingly
using their Stop Work authority, which is
reflected in our mature safety culture and
reduced incident frequency.
DAYS
30
permit
Figure 1. Stop work yearly comparison
0
10,000
20,000
30,000
40,000
50,000
2008 2009 2010 2011 20132012
Section 3
252013 HSE Annual Report
We take safety, including process safety very seriously. This means
understanding our risks and ensuring the right controls are in
place throughout our operations. Through the new Life Rules!
Program, we are focusing on the most critical hazards and risks to
protect our colleagues, customers and others that work with us.
26 Baker Hughes Incorporated
Enterprise employee injury/illness
performance
We achieved a 14% reduction in 2013 Total
Recordable Incident Rate (TRIR), surpassing
our 10% goal for the year. Although 66 fewer
recordable incidents occurred than in the
previous year, 580 employees still suffered a
recordable injury.
In addition to successfully lowering our TRIR,
we achieved an 18% reduction in our Days
Away From Work Case Rate (DAFWCR). Our
key HSE performance metrics continue to
outperform the International Association of
Drilling Contractors benchmark, and are in the
top quartile across the industry (Fig. 2).
Our loss control triangle (Fig. 3) shows that
employees submitted 487,060 observations
in 2013, a 20% increase year-on-year. This
increase correlates directly with our improved
safety and environmental performance.
0.0
0.5
1.0
1.5
2.0
3,000
3,500
4,000
20132011 2012
6
152
422
1,486
487,060
Days Away From Work Cases
Fatalities
Other Recordable Cases
First Aid Cases / Near Misses
Observations
Figure 3. Loss control
Figure 2. Three year injury rates and rig count
TRIR
DAFWCR
IADC TRIR
SSE TRIR
Rig count
Personal and Process Safety
272013 HSE Annual Report
Injury/illness data analysis
Figs. 4 and 5 illustrate the top five injured body
parts and the six most common types of injuries
sustained in 2013. Hand and back injuries
continue to be the most frequent body parts
affected. Combined, these injuries constitute
44% of the recordable injuries for the year
(Fig. 4). Although sprains and strains continue
to be the most prevalent type of injury, we
experienced a 14% reduction compared to
2012 and 31% compared to 2011 (Fig. 5).
Recordable injuries predominantly occurred
at the wellsite or at a Baker Hughes facility.
Together these locations accounted for 82%
of the recordable injuries (Fig. 6).
Figure 6. Recordable incidents by locale
Client-wellsite
Baker Hughes Service Center / Warehouse
Baker Hughes Manufacturing / Engineering
In-transit
Figure 4. Top five most affected body part recordable incidents
Figure 5. Nature of injury
0
50
100
150
200
Sprain/Strain
Laceration Fracture Contusion Abrasion/Scrapes
Crushing
Hand 27%
Back 17%
Shoulder 10%
Arm 8%
Knee 8%
Other types 30%
2011
2012
2013
28 Baker Hughes Incorporated
Transportation safety
Our transportation safety performance
improved last year. Our recordable Motor
Vehicle Accident frequency improved 4%, and
our overall accident frequency rate (all severity
classifications) decreased by more than 9%.
While these are very encouraging results, we
still have many opportunities for improvement.
As in the past, the majority of our recordable
accidents were due to a combination of factors,
but excessive speed for road and weather
conditions, improper following distance,
poor driver awareness of surroundings and
inconsistent journey management practices
continue to be our most frequent contributors,
reflecting the need for continued training and
strong oversight programs.
To address these issues, we completed a
thorough driving training program strategy
addressing not only the Baker Hughes-
specific driver training components (core
defensive driving), but also driver trainers and
assessors (Transportation Trainer and Assessor
Certification Course). Further support for these
two programs will come with the introduction
of the Transportation Safety Management
Leadership Program in Q1 2014. All three
programs will also be introduced globally. And,
we have initiated plans to pilot a state-of-the-
art driving simulator.
DID YOU KNOW?
With an increased focus on performing tasks correctly, Baker Hughes achieved a 31% decrease in sprains and strain-related injuries in the last two years .
5-year motor vehicle accident rates
0.0
0.5
1.0
1.5
2.0
2.5
2009 2010 2011 2012 2013
MVCR
MVAR
LVAR
PVAR
Personal and Process Safety
292013 HSE Annual Report
Air transportation
Following the tragic loss of two employees in
a helicopter crash in April 2013, we conducted
a thorough air safety audit of all three
helicopter providers under direct contract with
Baker Hughes. We also initiated a systematic
worldwide safety assessment of more than
100 helicopter service operators provided by
our customers to transport our employees to
offshore or remote land locations. Additionally,
we have developed stronger helicopter safety
processes and are working closely with an
international aviation safety consultant to
develop stronger operational controls and
tools to help us mitigate these hazards.
In 2014, we will increase our focus on leading
indicators to measure and drive overall HSE
performance. Our key proactive measures will
include the following. nn Active leadership engagement in HSE
through hands-on activities such as job site
visits or town hall meetings nn Strong employee participation in our
behavior-based observation program nn Robust reporting of near-miss events with
resolution of issues before a negative
impact or injury occursnn Evaluation of safe driving behaviors
through our in-vehicle monitoring systemsnn Prompt closure of audit findings/
nonconformances
DID YOU KNOW?
In Thailand, where many of our employees ride scooters to work, we provided motorcycle helmets to promote a stronger safety culture on and off the job .
In 2013, Baker Hughes vehicles travelled more than 310 million miles globally . This is roughly equivalent to 682 round trips to the moon or almost 13,000 times around the globe .
30 Baker Hughes Incorporated
Process safetyIn order to prevent major accidents arising
in our field, pipeline or chemical processing
operations, Baker Hughes applies a process
safety framework (Figure 1) that establishes
good design principles, engineering,
construction, operating, and maintenance
practices, while ensuring that products are
structurally and mechanically sound. This
framework includes the application of barriers
(control measures) and safeguards designed to
control risks that could result in a major spill,
release of gases to the air, or harm to people,
including surrounding communities.
Downstream process safety
Our downstream process safety system ensures
safe and reliable operations at our chemical and
industrial services reaction and blend plants. In
addition to compliance with local and country
regulations, all of our plants are governed by
the Baker Hughes process safety management
system. Our efforts over the past two years
have focused on developing and implementing
components of our process safety management
system including:nn Process safety information (PSI) –
contains details on the hazardous
chemicals used or produced by the
process, the technology of the process,
and the equipment in the process. PSI for
our plants, including Piping & Instrument
Diagrams, equipment data sheets, process
control data, and related information
was reviewed and verified for accuracy
in 2013. The plants use a combination
of manual and automated controls to
regulate the chemical processes, and
operating procedures are
certified annually.
nn Process hazard analysis (PHA) –
a systematic engineering approach for
identifying, evaluating, and controlling
potential hazards of processes involving
highly hazardous chemicals. All PHAs are
current including the required five-year
revalidation, and PHA action items are
tracked for completion. Layers of protection
or barriers are analyzed and installed to
mitigate identified risks.nn Management of change (MOC) –
the system to address contemplated
changes to a process, evaluate their
impact on health, safety, and environment
(HSE), and identify necessary changes to
operating procedures. The MOC process
was enhanced in 2012 and our chemical
plants average 100 MOCs each month,
demonstrating their commitment to safely
managing the continued growth and
change in our operations.
Design and Engineering
HumanFactors
MultibarrierPhilosophy
Measurementand Review Competency
Process andProcedures
RiskManagement
Figure 1. Process safety framework
Personal and Process Safety
312013 HSE Annual Report
Our employees are trained on their specific
processes and are recertified on a regular
schedule. Our inspection and testing of
equipment for mechanical integrity includes
Recognized and Generally Accepted Good
Engineering Practices, which include
industry recommended practices, equipment
manufacturer requirements, and general
preventive maintenance recommendations.
Upstream process safety
Our upstream process safety program focuses
on products and services to assure wellbore
integrity. This is accomplished through the
application of barriers (control measures), and
safeguards designed to control risks that could
result in the release of hydrocarbons, causing
harm to people or the environment.
Various tools are used to ensure subsurface
threats are understood and controls are in place
to mitigate hazards. In 2013, Baker Hughes
launched our “Think Process Safety” campaign
along with 10 Critical Requirements of Upstream
Process Safety (Fig. 2).
Figure 2. Ten critical requirements of upstream process safety
BARRIERSKnow your equipment, process, and people barriers and confi rmthey are in place and tested.
LOST BARRIERIf a barrier is lost,immediately stopand fi x it.
SUBSURFACEUNCERTAINTIES
Know andcommunicatesubsurfaceuncertainties.
WELL CONTROL EQUIPMENTKnow your wellcontrol equipmentand confi rm it’scertifi ed and tested.
TRAINED PEOPLEConfi rm all peopleare trained andcompetent for the task.
POLICIES &PROCEDURESFollow policiesand proceduresor get approvalto deviate.
HRARISK ASSESSPerform riskassessments duringplanning and forchanges.
WALK THE LINE‘Walk the line’ ontemporary rig-upsand confi rm set-up = layout drawing.
EMERGENCYRESPONSETest your emergencyresponses andconduct regulardrills.
REPORT / LEARNReport ProcessSafety incidents andProcess Safety Near Misses, investigate, share, and learn.
32 Baker Hughes Incorporated
As an expansion to our traditional failure,
mode and effects analyses, we overlaid an
additional risk analysis methodology, the bow-
tie analysis (Figure 3), to provide a more visual
representation of potential threats and control
measures to ensure jobs are conducted safely.
A series of 22 bow-tie analyses were conducted,
field tested, and published last year for
operations presenting the most critical HSE risks.
In 2013, our competency management
program gained global certification through
the International Association of Drilling
Contractors. Through completing a tailored
learning and development path, with regular
worksite assessments, our workforce develops
competence to perform safety-critical tasks.
To date, more than 75,000 competency
assessments have been completed and are
tracked in our learning management system.
In Q4 2013, an enhanced upstream process
safety awareness training course was launched,
which focused on the 10 critical requirements
and on risk management during service
delivery. To date, 11,546 employees have
completed this training.
Midstream process safety
Our midstream business helps our customers
assess and maintain the integrity of their
new and existing pipeline systems and
process plants. We use a rigorous protocol
of engineering design, review, and hazard
and operability analysis conducted jointly by
the client and Baker Hughes engineers. In
2013, we conducted more than 3,000 tenders
using this process. Our support occurs during
the precommissioning, commissioning, and
decommissioning phases of projects. For 2014,
the midstream team will expand its assessment
capabilities through the use of bow-tie analysis
which will be included in our competency
assurance program.
Baker Hughes was awarded second place in SHELL’s Process Safety Video Challenge for our musical number
“Think Process Safety!”
Personal and Process Safety
332013 HSE Annual Report
Baker Hughes is committed to working with
industry groups and regulatory agencies
to further strengthen the principles of
process safety in our organization and the
industry. Additionally, we partner with our
industry colleagues on various committees
in organizations such as the Center for
Offshore Safety and the International Oil and
Gas Producers Association to develop new
standards, best practices, and key performance
indicators related to process safety in the oil
and gas industry.
Failure of C1 Equipment
Example:Loss of Primary Containment
Fatality
Loss of Well Control
Spill or Release to
Environment
Follow customer emergency response
procedures
Follow customer emergency response
procedures
Follow customer emergency response
procedures
Improper Design
PDM Process
Failure Trending Analysis
Pre-job Analysis
Function Testing at Rig Site
Review of Customer/Client Requirements
Equipment Malfunction
Figure 3. Managing risk with bow-tie analysis
34 Baker Hughes Incorporated
Environmental PerformanceOur environmental stewardship efforts continue
to focus on resource conservation to reduce
energy use, greenhouse gas emissions, and
water consumption. This focus aligns with
our sustainability strategy, contributing
to the long-term profitable growth of the
company while enhancing the lives of people
and the environment. We achieved a 13%
overall reduction in our resource use in 2013,
exceeding our 10% goal. A critical component
of our success was the collaborative efforts
of our business units with internal and
external partners, and the engagement and
commitment of our employees.
Resource conservation
Our overall resource reduction results were
normalized to revenue and calculated as a
weighted average from our top three resources:nn Electricity – 40%nn Natural gas – 40%nn Water – 20%
Resource reduction results
Overall resource reduction: 13%
Electricity: 10%
Natural gas: 13%
Water: 17%
Greenhouse gas emissions: 16%
Section 4
352013 HSE Annual Report
Our commitment to protect the environment is anchored in our
HSE and Climate Change Policy Statements. These policies outline
our commitment to promote a culture of continuous improvement
through the development and implementation of operational
standards and best practices that protect the environment and the
communities in which we live and work.
36 Baker Hughes Incorporated
We achieved a 10% reduction or more in each
resource category: electricity, water, natural gas,
off-road diesel, propane, and fuel oil (Fig. 1).
These results are calculated from resource data
for 221 facilities tracked through GreenLink,
our environmental performance database.
These facilities represent more than two-thirds
of the energy and water used across our global
suite of manufacturing and operations facilities.
Our conservation efforts continue to enhance
our financial performance. During 2013, our
total energy savings were estimated at about
USD 10 million.
Energy efficiency and greenhouse
gas emissions
To support our commitment to manage the
risks associated with climate change, we
calculate greenhouse gas emissions from our
global energy use. Three years ago, we began
reporting energy savings achieved through
energy efficiency projects, and in 2013 we
developed a formal energy management
standard for identifying significant energy
sources and implementing measures to
effectively reduce energy use.
-50
-40
-30
-20
-10
0Electricity Natural Gas Water Propane
Off-Road Diesel
Perc
enta
ge
Cha
nge
Year
-on-
Year
Fuel Oil
Goal 10%
Figure 1. Progress towards 10% reduction goal by resource type
Environmental Performance
372013 HSE Annual Report
We met our greenhouse gas emissions
reduction target for 2013, eliminating 38,000
metric tons of carbon dioxide equivalent (CO2e)
through heightened employee awareness
of energy conservation and specific energy
reduction projects at our facilities. Through our
continued application of sustainable building
technologies, we saved an additional 8,000
metric tons of CO2e. Emissions from fleet
transportation and rental car mileage decreased
3% from 2012, eliminating an extra 7,500
metric tons of CO2e.
Minimizing our carbon footprint
We remain committed to data quality and
transparency in reporting our carbon footprint.
Last year, we were the highest ranked service
company in the energy sector for the Carbon
Disclosure Project. Our score was a significant
improvement over the previous year, and we
ranked highest in the areas of governance and
strategy, verification, stakeholder engagement,
and opportunities.
We continue to improve energy efficiencies
in our facilities. Our most significant energy
conservation effort last year focused on
building automation systems, including
upgrades or new installations at 51 locations
worldwide. Highlights of additional projects
include the following:nn Redesigning water chiller systemsnn Converting from diesel power generators
to grid-supplied electricitynn Optimizing production scheduling
(minimized equipment shutdown
and startup)nn Retrofitting light fixturesnn Replacing equipment with
energy-efficient versions
We will continue to improve energy efficiency in
future years as we implement our new energy
management operational control procedure,
which is aligned with the recent ISO 50001
standard for energy management systems.
DID YOU KNOW?
Our total CO2e savings of 53,500 metric tons was equal to the annual greenhouse gas emissions from more than 11,000 passenger vehicles .
Emissions reduction and CO2e savings
Energy Resources: 38,000 metric tons CO2e
Sustainable Buildings: 8,000 metric tons CO2e
Transportation: 7,500 metric tons CO2e
38 Baker Hughes Incorporated
Water conservation
Water is critical for the upstream oil and gas
industry, so reducing fresh water use through
proactive water management practices is a
high priority. Our efforts focus on developing
technologies and services to promote water
reuse and maximize water recycling. In 2013,
these efforts reduced water use at our facilities
by 17% (normalized).
Fig. 2 illustrates the results of our efforts to
reduce water use and disposal, and
increase recycling.
To further reduce the potential impact on
fresh water sources, we use several water
management tools (e.g., IPIECA’s Global Water
Tool for Oil and Gas, GEMI Local Water Tool™
and the Maplecroft Global Water Security Risk
Index) to identify operations that are located
in water-stressed areas. Approximately 25%
of the countries we operate are at risk for
water shortages. Knowing which areas have a
higher potential for water scarcity allows us to
better plan water management strategies and
reduce risk.
DID YOU KNOW?
Across the company we conserved 308,000 metric tons of water, which is enough to fill more than 1 .5 million standard-size bath tubs .
Figure 2. Water profile
0
500
1,000
1,500
2,000
2,500
3,000
Mas
s (T
hous
and
s of
Met
ric
Tons
)
Disposed Wastewater*Water Consumption
2011 Actual
2012 Actual
2013 *Normalized
Environmental Performance
392013 HSE Annual Report
Facility water cycle management in diverse conditions
Managing the challenges of water supply and demand is an expanding concern on a
global basis, especially in regions where water is a scarce resource. Our internal water
management tool was developed to assess and quantify water management components
and identify strategies and technologies for managing a facility’s water cycle. This tool was
used for seven facilities in Africa and its use was later expanded globally. As a result, water
management techniques were successfully incorporated at facilities in Iraq and Brazil, as
highlighted below.
Basra Iraq facility
At our base of 600 employees, about 7,500m3 of potable water was consumed per month
with an average of 180m3 disposed every day, representing about 70% of the supplied
water. Optimization efforts included separation of potable and nonpotable (i.e., river) water
sources to reduce the use of potable water, which is in scarce supply in the area. The water
quality required for process water was met by substituting filtered river water. We reduced
potable water use by 5,400m3 per month and reduced costs by 34%. Waste water disposal
was also cut by 16% with the installation of a wastewater recycling system.
Macae, Brazil
A recycling system was installed to treat oily waste water generated from washing
oilfield trucks, skid units, and other equipment. A flocculation system was chosen, with
approximately 143m3/month of wastewater treated and reused, reducing fresh water use
and saving more than USD 19,000 per month for disposal.
40 Baker Hughes Incorporated
Last year, our water conservation projects
included identifying water sources other than
potable water for use in operational processes
and landscape irrigation. An internal water
cycle management tool was developed to
further our understanding of operational
water usage requirements and the associated
environmental aspects so we can effectively
manage water throughout its life cycle. The
development of a strong plan for the water
management cycle reduces costs, ensures a
sustainable supply, and addresses community
needs and concerns. This tool is used when
designing new facilities and when upgrading
existing locations.
Waste minimization and recycling
Our approach to waste minimization
emphasizes source reduction (elimination),
recycling, reuse or reclamation, and proper
disposal of any remaining wastes. Waste
minimization aligns with our sustainability
efforts by conserving natural resources,
preventing pollution, and reducing disposal
and compliance costs.
All operations are required to prepare a waste
management and minimization plan to identify
waste streams and reduction strategies along
with approved waste vendors. In 2013, waste
(992,000 metric tons) and recycling (26,000
metric tons) volumes decrease by 1% and
41%, respectively. The decrease in waste
was due largely to the increased efforts of
our Pressure Pumping product line and our
facility consolidations. Wastewater remains
our largest waste stream and comprises
98% of our total waste. Less than 1% of all
waste (approximately 8500 metric tons) was
categorized as hazardous. We believe our
recycling volumes have decreased concurrent
with improved efficiency throughout our
operations, especially in supply chain.
About 70% of our total recycled materials
is comprised of metals (55%) and solvents
(15%). The remaining 30% consists of
wastewater, wood, and empty industrial or
consumer containers.
DID YOU KNOW?
Our employees recycled 120 metric tons of electronics in 2013 . This is equal to the weight of 9 Big Ben bells in the Elizabeth Tower at the Westminster Palace in London .
Environmental Performance
412013 HSE Annual Report
Recycling revenue
We continue to collaborate with vendors
to remarket and recycle obsolete electronic
equipment and to incorporate mixed media
materials into existing services. As illustrated in
Fig. 3, USD 18 million in revenue was obtained
from our recycling efforts, with USD 0.5 million
expensed to recycle some materials.
Additionally, we have diverted 9% of our used
materials from landfills by recycling, which
resulted in a disposal offset of about
USD 0.4 million in the U.S. alone. The net
gain from recycling is about USD 17.5 million.
DID YOU KNOW?
More than 15,000 metric tons of metal were recycled by employees last year . This is enough metal to construct 225 Boeing 747 airplanes .
Our estimated total CO2e savings from recycled paper, cardboard and wood resources is equal to the amount of carbon sequestered annually by 2,397 acres of forest . This is equal to nearly 700,000 trees .
Net gain USD 17.5 million
Disposal offset
USD 0.4 million
Cost USD 0.5 million
Revenue USD 18 million
Figure 3. Recycling revenue
42 Baker Hughes Incorporated
Spill performance
Any spill can pose a risk through potential
harm to the environment, possible community
impacts, worker exposure, and unnecessary
waste and downtime. Our goal is to have a
Perfect HSE Day every day and that means no
harm to the environment. Spill prevention is
critical and benefits everyone.
In keeping with the Perfect HSE Day, we
implemented comprehensive spill prevention
procedures and response plans in 2013, along
with engineered specifications to improve
our chemical storage and handling practices.
We also analyzed spills based on the total
number of spill incidents and total volume,
with an emphasis on spills considered serious
or major (1-10 bbls and >10 bbls, respectively).
Additionally, spills occurring within and outside
containment were given special consideration,
including those released to water or soil.
In 2013, we had 1,129 spill incidents totaling
3,719 barrels, reflective of a 6% normalized
decrease in volume year-on-year. Additionally,
the volume of serious/major spills decreased
5% as illustrated in Fig. 4.
Of the spill incidents we classify as serious or
major, 61% occurred at customer sites, 33% at
our facilities, and 6% during transport. While
the number of spills is higher at customer
sites, the overall volumes are greater at our
Baker Hughes facilities. Only 5% of our serious/
major spill incidents occurred offshore, which
represents only 1% of the total volume.
Spill incidents
Most spills reported are relatively low-volume
incidents, with just 6 spills (1%) contributing
50% of the total volume. Of our serious
and major spill incidents, 55% were fully or
partially contained, which accounts for nearly
70% of the total volume (2,408 bbl). These
large spills receive considerable attention,
with executive participation in the incident
review. However, we expect the cause of
all spills to be investigated, so appropriate
corrective actions can be taken to prevent
recurrence and eliminate spill risk factors
throughout our operations. We continue to
improve spill transparency by encouraging
employees to report all spills, large or small,
in our incident reporting system. As illustrated
in Fig. 5, reporting of spills less than 1 barrel
increased 8% from last year, while total volume
decreased 6%. 0
1,000
2,000
3,000
4,000
5,000
2011
Volu
me
in B
BLs
2012 2013
Figure 4. Spill severity by volume
Minor (<1 bbl)
Serious (1 – 10 bbl)
Major (>10 bbl)
Environmental Performance
432013 HSE Annual Report
Effective response strategies ensure that all
spills are remediated promptly with minimal and
temporary environmental impact. Continued
visibility of all spill incidents, appropriate
corrective action and spill prevention campaigns
will continue to drive improvements.
Spill causes
Identifying the causes of spills enables training
efforts and resources to be targeted to these
risks. The top five causes of serious/major
spills (top 6% with 80% total volume) during
2013 are illustrated in Fig. 6. Valves left open
contributed to about one-third (31%) of these
spills. The second most frequent cause was
listed as “Other,” which includes factors such
as weather, sabotage, and human error.
DID YOU KNOW?
In 2013, Baker Hughes launched the Greenlink Dashboard . The Dashboard provides “real-time” performance data to show progress on environmental goals .
Figure 6. Spill causes
Valve left open 35%
Other 30%
Equipment / pump failure 20%
Hose rupture / popped off 8%
Overfill 7%
Figure 5. Number of spill incidents by severity
0
200
400
600
800
1,000
1,200
2011
Num
ber
of S
pill
Inci
den
ts
2012 2013
Minor (<1 bbl)
Serious (1 – 10 bbl)
Major (>10 bbl)
44 Baker Hughes Incorporated
Spill costs
While spill incidents are an important indicator
of environmental performance, they also affect
our environmental costs. Total spill costs were
approximately USD 4.1 million in 2013. This
marks a 5% overall decrease year on year, and
a 37% decrease in third-party cleanup costs.
Continued emphasis on inspections, analysis
of risk factors, proper controls, and effective
response have contributed to this success.
Environmental reserves
Environmental remediation is managed
centrally, and accrued reserves are audited
periodically to ensure compliance with the
U.S. Sarbanes-Oxley Act and Securities and
Exchange Commission requirements. At year
end, we reserved a total of USD 34 million for
remediation at 72 sites, including USD 4 million
for Superfund Liabilities. Cash spending totaled
about USD 7 million, down 11% from 2012.
The environmental reserve trend for the past
three years is illustrated in Fig. 7.
DID YOU KNOW?
As part of our Perfect HSE Day initiative, a reusable mug program was launched at 17 offices . More than 8800 employees made the commitment to stop using Styrofoam in favor of the reusable stainless steel mug . These efforts reduced the use of Styrofoam cups by 60% . With this success, the reusable mug program will be expanded globally .
Figure 7. Environmental reserve trend
0
5
10
15
20
25
30
35
40
2009
Rese
rve
in M
illio
ns
201220112010 2013
Remediation
Superfund
Figure 8. Benchmark analysis: Environmental reserves as a percent of revenue
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Perc
enta
ge
of R
even
ue
Environmental Cost Type
Superfund Remediation Total Reserves
* Note: Data obtained from publicly available information
(2013 10K filings)
Customer reference
Peer reference
Baker Hughes
Environmental Performance
452013 HSE Annual Report
Celebrating Earth Day around the globe
Baker Hughes employees around the world celebrated Earth Day 2013 by participating in
activities that promote environmental awareness and connect employees with the world or
natural environment around them.
For example, the Wireline Services group in Vietnam organized an employee coastal
cleanup event to protect the environment and promote awareness among employees and
the community (pictured, below right).
In India, our employees at the Kakinada base planted trees around their location to
celebrate Earth Day. In a similar effort in Colombia, our employees started a tree planting
initiative in 2012 with 40 employees planting 65 trees in the forest. This event generated
interest and enthusiasm, and in 2013, more than 166 employees planted 285 trees
(pictured, below left).
Benchmark analysis:
Environmental reserves
An evaluation of Baker Hughes environmental
reserves as a percentage of revenue (Fig. 8)
indicates our liabilities are lower than our
peer and client references. Our lower ratio
compared with the client references may
reflect some differences in the nature of the
businesses and associated risks. However, our
lower remediation costs also may suggest more
effective due diligence to prevent acquisition of
new cleanup sites along with strategic, cost-
effective management of existing sites.
Environmental investment
In 2013, Baker Hughes incurred an estimated
USD 85 million in costs for environmental
protection and compliance management,
including permitting, waste disposal, spill
response, and other environmental activities.
These costs are essentially flat year on year.
Environmental capital costs of about USD
10 million include about USD 7 million to
conserve energy, with the remainder for
secondary containment structures to prevent
environmental impacts from spills and other
protective measures such as emission control
systems to protect air quality.
46 Baker Hughes Incorporated
Environmental stewardship in hydraulic fracturing operationsWhile hydraulic fracturing has existed for many
years, it has attracted increased attention
in recent years because of the potential for
social and environmental impacts. We manage
the risks associated with this activity through
continued efforts to reduce environmental
impacts and by engaging with communities and
regulators to understand stakeholder concerns.
In October, Baker Hughes joined eight other
companies that are members of the Petroleum
Services Association of Canada to unveil a
code of conduct related to hydraulic fracturing
operations. Development of the code involved
consultations with community stakeholders over
a six-month period. The code outlines standard
practices for technical and environmental
performance, as well as guidelines companies
should follow when dealing with community
groups and other stakeholders. It is intended
to increase public confidence in hydraulic
fracturing through transparency and consistent
best practices for these activities.
Fracturing pumps converted to run on natural gas
Environmental Performance
472013 HSE Annual Report
We place a special emphasis on mitigating the
environmental risks associated with fracturing
chemicals. Our SmartCare™ qualified systems
and products have been in use since 2009 to
ensure the use of environmentally-preferred
products. SmartCare products are screened
through an advanced proprietary process. Since
2011, the component substances used in our
fracturing fluids have been disclosed in the
FracFocus™ registry. The chemical disclosure
registry serves a vital role in communicating
important chemical information to the public.
DID YOU KNOW?
At year-end 2013, our environmental services group completed 239 product evaluations as part of the SmartCare program, and developed a library of 251 substance hazard profiles, of which nearly 80% pertain to hydraulic fracturing fluids .
Laboratory testing of ClearStar™ fracturing fluid
48 Baker Hughes Incorporated
In 2013, Baker Hughes announced the
introduction of the new ClearStar™ fracturing
fluid system that is an alternative to traditional
guar-based fluids. The supply of guar is highly
subject to the impact of climate change (drought
or flooding) in the areas from which this natural
product is sourced. The ClearStar system uses
a refined cellulose derivative polymer to attain
superior viscosity. In product testing, the
ClearStar fracturing fluid system produced an
average of 11% more cumulative oil over 350
days of production compared to wells stimulated
using premium, guar-based fluids.
Two years ago, we introduced our first
bifuel (also called dual-fuel) pumps into our
U.S. hydraulic fracturing fleets. The Rhino™
Bifuel pumps are able to replace as much as
70% of the engine’s diesel fuel supply with
natural gas (field gas, liquefied natural gas,
or compressed natural gas) with no loss in
hydraulic horsepower. This not only reduces
the carbon footprint of these jobs, but also
improves operational efficiency, lowers costs,
reduces safety risks, and capitalizes on the
availability of North America’s abundant natural
gas production supplies. We achieved a 32%
Dry on the Fly™ process reduces transportation
Environmental Performance
492013 HSE Annual Report
DID YOU KNOW?
Our Baker Hughes Water Management team has treated and reused more than 50 million barrels of water for hydraulic fracturing use in the past 18 months . In 2013, Baker Hughes treated water for use in more than 350 wells in North America . Our operating capacity is currently 2 .5 million barrels of water per day .
reduction in greenhouse gas emissions using
these bifuel pumps, based on calculations
completed for more than 50 wells. At the
end of 2013, we had 80 completed pumps
(six fleets) in U.S. land and 19 (one fleet) in
Canada. We are committed to convert all our
pumps to run on natural gas.
Since hydraulic fracturing uses more water
than any other phase of drilling or completing
a well, our Baker Hughes Water Management
team continues to develop technologies and
services that conserve fresh water through
reuse, thereby reducing transportation and
disposal. In November 2013, Baker Hughes
and DuPont Chemical Solutions announced
a strategic arrangement to bring more
sustainable water treatment technology to the
oil and gas industry. Chlorine dioxide will be
used in conjunction with our Baker Hughes
H2prO™ water management service so water
used in pressure pumping can be treated
onsite and reused. Chlorine dioxide has been
used for more than 60 years to prevent the
growth of bacteria and corrosion in municipal
drinking water, food processing, and industrial
cooling applications.
Historically, fracturing fluids were manually
premixed and then transported to the wellsite
for application. To prevent the premature
hydration of the gelling agent during
transportation, a large amount of mineral oil-
based material had to be added. The process
of mixing the fluids was labor intensive and
required protection from chemical exposure.
Our Baker Hughes Dry on the Fly™ hydration
system is a more sustainable solution that
eliminates these HSE issues. The mixing process
is automated at the wellsite, so the need for
mineral oil is eliminated. Since only the dry
powder is transported to the wellsite, the volume
of material transported is reduced by about
60%. In 2013, this resulted in approximately 280
fewer truck trips, with an associated reduction in
fuel consumption and emissions.
50 Baker Hughes Incorporated
Driving Flawless ExecutionIn order to minimize HSE risks and prevent
harm to people and the environment, it is
critical to understand the industry trends that
present HSE issues. One of the ways that we
validate our understanding of the trends is
through collaboration with our customers.
Engaging in this way, we share best practices
and identify ways to address the industry’s
new challenges through our HSE management
system. We assure our management system
using tools such as the Baker Hughes Operating
System (BHOS), external certification to
international standards; and internally, through
our audit program.
Shaping industry HSE performance
Baker Hughes works collaboratively within the
industry and directly with customers to address
common HSE issues and emerging challenges.
We are an active member of the International
Association of Oil and Gas Producers, serving
on the executive Management Committee
as well as many technical committees and
workgroups. Baker Hughes also is a member
of and volunteers subject matter expertise to
the technical committees and workgroups
of the American Petroleum Institute; and, is
active in committee work within the Society
of Petroleum Engineers, the Society of
Chemical Manufacturers and Affiliates, and the
International Association of Drilling Contractors
(IADC). In addition, we are one of the founding
members of the Center for Offshore Safety.
These contributions and participation all help
advance the industry’s performance related to
HSE and social responsibility.
Section 5
512013 HSE Annual Report
We believe we can improve safety across our industry by
collaborating with our customers and communities. We continue
to enhance our internal standards and practices to ensure our
efforts are focused and on-target. Through our audit program, we
verify that these standards are implemented and effective across
the organization.
52 Baker Hughes Incorporated
Along with many companies, Baker Hughes
subscribes to the services of Welling and
Company, an international research and
consulting firm that conducts specialized
market analysis in the energy industry and
related fields. In particular, we analyze
Welling’s findings regarding the importance
HSE plays in the buying decisions of our
customers. For the third consecutive year
since 2011, their annual Customer Perception
Survey (Fig. 1) indicated that HSE is the primary
consideration of oil and gas companies when
choosing a contractor as a business partner.
The trend is growing year-on-year, confirming
our own analysis from our direct interaction in
the industry and with our customers.
Concurrent with our annual internal HSE
performance review and development of
next-year objectives, Baker Hughes hosts
an engagement forum to advance the HSE
conversation with and between oil and gas
companies and to provide deeper, collective
insight into factors driving HSE performance
across the industry.
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2009 – 2010 2010 – 2011 2011 – 2012
Figure 1. Most important factors in selecting business partners according to our customers
Baker Hughes HSE Exchange Forum – Addressing Industry
HSE Performance
Commitment to HSE
Equipment quality / reliability
Trained and capable field personnel
Availability / delivery
Technical support
Responsive to needs
Track record / experience
Handle technical challenges
Price competitiveness
Driving Flawless Execution
532013 HSE Annual Report
During the 2013 exchange forum, participants
addressed one of our industry’s most critical
issues, the combination of a rather flat safety
performance (Fig. 2) in recent years and an
upward trend in fatality frequency and
injury severity.
Attendees identified four primary areas of
focus: attrition/turnover; HSE cultures; risk
perception/tolerance; and competence/technical
proficiency (Fig. 3). The candid conversations
during the forum identified the following
challenges to be tackled by our industry: nn Finding more effective/efficient processes
and systems to addressnn HSE culture nn Stop Worknn Risk tolerancenn Upstream process safetynn Competency
nn Finding solutions to eliminate hazards and
risks associated withnn Transportationnn Hand injuriesnn Pressurizationnn Fatiguenn Dropped objects
0
5
10
15
20
25
22%
7%
24% 24%
19%
3%
Figure 2. OGP - June 2013 Safety Performance Indicators Report
Figure 3. Key areas of HSE needing focus by the industry
Risk tolerance
Inherent risk
Culture
Competency
Workforce
Other
0
1
2
3
4
5
6
7
8
2012201120102009200820072006200520042003200220012000199919981997199619951994
Industry TRIR (per 1 million work hours)
Industry Lost Time Incident Rate (per 1 million work hours)
Industry Fatal Accident Rate (per 100 million work hours)
54 Baker Hughes Incorporated
Baker Hughes produced and released four
videos to promote best practice in upstream
process safety; management of change (MOC);
Life Rules!; and, achieving the Perfect HSE Day.
The videos are available through
www.BakerHughes.com and YouTube.
HSE management system
Our HSE management system (MS) continues
to provide the foundation of our HSE programs,
and consists of our HSE and Security (HSE&S)
policy statement, 16 elements, and a wide
variety of operational control procedures
designed to drive flawless execution. This
HSE MS continues to change and evolve to
meet the HSE needs of the business, which
was restructured to form 24 geomarkets. Last
year, the position of chief security officer and
vice president of HSE was separated and so,
the security team will be developing a new
management system for their procedures, but
will continue to use and reference applicable
procedures covered in the existing HSE MS.
Policy
Our HSE&S policy statement was amended
to further strengthen our commitment to
protecting people and communities, company
assets, and the environment. The emphasis
on Stop Work was enhanced by making it an
individual obligation and company responsibility,
and process safety is now included to reflect our
heightened commitment.
Baker Hughes Operating System (BHOS)
Last year, we migrated the entire HSE MS,
including all translated procedures, into BHOS.
This migration strengthened our commitment
to driving consistency and conformance by
DID YOU KNOW?
The HSE MS has more than 1,100 documents translated in Spanish, Portuguese, Russian, German, and Arabic combined!
Upstream Process Safety
Management of Change (MOC)
Life Rules!
Perfect HSE Day
Driving Flawless Execution
552013 HSE Annual Report
providing employees a centralized location to
access all HSE and technical procedures. User
interface was enhanced by providing
employees visual BHOS icons, to identify
approved procedures.
Competency
Learning is a core value at Baker Hughes
and we believe that our training programs
are critical to our business success. In 2011,
Baker Hughes became the first integrated
oilfield service company to receive the new
accreditation from IADC for our Competence
Management Program for the Gulf of Mexico.
Last year, we made history again by obtaining
full global accreditation from IADC for our
Competence Assurance Program. To date,
more than 2,700 technical assessments have
been conducted to ensure that employees are
competent and have acquired the necessary
skills to perform their jobs safely and advance
their careers. Although the performance criteria
for each assessment are unique, there is one
commonality; the first component of every
assessment is safety. Placing safety first ensures
employees can effectively execute tasks and
mitigate risks to fulfill our HSE commitment and
exceed our customer’s expectations.
Within Baker Hughes, a technical workforce
of 20,000 employees has completed more
than 75,000 technical assessments.
External validation by Bureau Veritas
A number of our facilities obtain external
certification of their HSE management
system to International Organization of
Standardization (ISO) standards. To achieve
greater organizational and cost-efficiency, we
initiated a three-year program to transition all
local HSE certifications to a single enterprise-
wide multisite certificate. During 2013, we
completed the transition of locations in the
U.S., United Kingdom, Norway, Canada, The
Netherlands, and Italy. The remaining sites in
Latin America and Asia Pacific will transition
during 2014.
As part of this multisite certification effort
in 2013, we completed the first global
headquarter audit to ISO 14001, the
environmental management system standard
and OHSAS 18001, the occupational health and
safety management system standard. During
the audit no nonconformities were noted and
the company was commended on the extent
DID YOU KNOW?
The average technical assessment takes one week to complete . To date, the Baker Hughes technical workforce has completed more than 1,438 years of competency assessments . That’s a lot of experience!
56 Baker Hughes Incorporated
of leadership involvement. Additional strengths
mentioned in the final report were:nn Use of bow-tie analysis in the assessment
of hazards, risk, and aspectsnn Proactively calculating and disclosing
carbon footprintsnn Tracking performance and statistics on
meeting goals and objectivesnn Recording and tracking incidents, audit
results and associated corrective actions
At year-end, 70 Baker Hughes facilities were
certified to ISO 14001. Of these, 22 facilities
were also certified to OHSAS 18001. These
certifications represent operations in a
number of regions (Figs. 4 and 5) and include
production and administrative facilities across
all product lines.
HSE auditing
As a critical component of our compliance and
internal assurance system, internal HSE Audits
are used to verify that our HSE performance
is real, and effective. Our audit program
evaluates our operations worldwide, confirming
regulatory compliance and conformance to
our HSE MS. It also attests that our efforts
are consistent with customer requirements
as well as with industry standards and best
practices. The program facilitates continuous
improvement in HSE performance, engaging a
wide range of employees including operations
and HSE personnel to identify hazards,
mitigate risks and implement actions to ensure
compliance and best practice. Our audit
program is benchmarked annually through
our membership in the International Audit
Protocol Consortium (IAPC), a multi-industry
representation of global auditors.
Managing the HSE audit program
Three specific audit types address specialized
aspects of HSE and frame the program: process
safety management (PSM); environmental
emphasis; and HSE MS.nn Process Safety Management (PSM) .
In 2013, 11 PSM audits were conducted at
chemical plants. These audits are used
to reconfirm that our chemical plants
worldwide are in compliance with
regulatory requirements and meet industry
best practice to mitigate process safety
Europe, Africa, Russia, Caspian 38%
Latin America 30%
Global Products and Services 26%
Middle East / Asia Pacific 5%
North America 1%
Figure 4. ISO 14001 certifications by region Figure 5. OHSAS 18001 certifications by region
Europe, Africa, Russia, Caspian 5%
Latin America 75%
Middle East / Asia Pacific 20%
Driving Flawless Execution
572013 HSE Annual Report
related risk. This multiyear program is on
track with 69% of the facilities assessed,
and 98% of the findings closed (Fig. 6). No
major findings have been identified.nn Environmental emphasis . Environmental
assessments were conducted at 31 facilities
in 2013 and 45 in 2012. These audits
were designed to reconfirm environmental
compliance with U.S. Environmental
Protection Agency requirements for the
upstream chemical business segment.
This program was also used to identify
opportunities to enhance chemical storage
and management practices and evaluate
related investment needs at each facility.
Last year, the program identified efficiencies
that resulted in a 30% reduction in
external compliance costs related to
stormwater pollution prevention and oil
spill prevention. This multiyear program is
on track with 97% of the facilities assessed
and 100% closure for compliance related
findings (Fig. 7). No major findings have
been identified.
0
50
100
150
200
20%
40%
60%
80%
100%
Q1 Q2 Q3 Q4
2012
Q1 Q2 Q3 Q4
2013
0
10
20
30
40
50
20132012
DID YOU KNOW?
More than 300 noteworthy efforts of proactive HSE actions were identified across Baker Hughes in 2013 .
Figure 6. PSM audit findings status Figure 7. Environmental emphasis audit status
Scheduled
Completed
Total findings
Findings closed
Percent closed
58 Baker Hughes Incorporated
nn HSE management system . HSE MS
audits were conducted at 97 operations
worldwide in 2013, representing all
regions and product lines, and about
10% of our applicable locations. In
keeping with International Audit Protocol
Consortium standards, our audit selection
criteria were risk-based, with input from
business segment HSE directors and
senior operations leadership. Each audit
report undergoes a thorough quality
review, offers important feedback to local
operations on the areas where they are
doing well, and provides a roadmap for
further improvement.
Audit findings are classified as either “major,”
“finding,” or “observation.” Noteworthy efforts
including best practices are also identified and
communicated across the enterprise. These
noteworthy efforts represent proactive HSE
initiatives, and in 2013 were identified for
areas such as air quality, waste management,
waste minimization, chemical management, fall
protection, transportation safety, equipment
safety, and facility improvements.
In 2013, nearly 2,500 opportunities for
improvement were identified as findings. Of
these, six were classified as major (Fig. 8),
representing less than 1% of the total findings
and a 73% reduction from two years ago.
Our major finding closure rate improved 37%
over the last two years, with the time to closure
averaging 72 days in 2013 (Fig. 9). The major
finding closure status is reviewed quarterly as
part of the executive compliance and internal
controls process. The overall finding closure rate
for all audit findings across the enterprise was
excellent, at 86%.
Figure 8. Total number of audits and major findings
Figure 9. Average days to closure for major findings
0
20
40
60
80
100
120
201320122011
115
83
72
0
20
40
60
80
100
201320122011
9295 97
1522
6
Number of audits
Number of major findings
Major finding closure rate (days)
Driving Flawless Execution
592013 HSE Annual Report
Engaging our leaders
Business leaders participated as team auditors
during 2013, in a new effort to enhance our
interdependent HSE culture, embed HSE within
operations, and accelerate joint ownership
and understanding of HSE audit findings.
Since the new process was introduced in May,
75% of our audits included participation
by a business leader. Their visible and vocal
leadership connected with frontline employees,
demonstrating their personal ownership of
HSE and serving to further accelerate our
interdependent HSE culture across
Baker Hughes.
One key aspect of our business leader
involvement was their independent role as they
audited facilities outside of their own remit.
Beyond auditing, this provided an opportunity
for learning and sharing of best practices across
other business segments.
The path forward
To continue our drive for efficiency, HSE
and quality will be conducting cooperative
audits in 2014. These audits will strengthen
cross-function collaboration and minimize
disruption to operations. Self-assessments,
which provide an additional level of assurance,
will be expanded in 2014. This will supplement
the formal HSE and special emphasis audits,
providing greater assurance and ownership
with location leaders.
DID YOU KNOW?
Of the business leaders participating in audits during 2013, 85% were presidents, vice presidents, directors, or managers .
60 Baker Hughes Incorporated
Recognition
Baker Hughes HSE recognition
The Baker Hughes Chairman’s HSE Excellence
Award and the President’s HSE Recognition
Awards recognize teams that have achieved
excellent health, safety, and environmental
(HSE) performance. The Chairman’s HSE
Excellence Award is presented to the five
applicant teams that have best demonstrated
sustained HSE excellence over a three-year
period and is awarded by Martin Craighead,
Baker Hughes President and Chief Executive
Officer. The President’s HSE Recognition Awards
recognize excellence over the past year and are
bestowed by business segment presidents.
Chairman’s HSE Excellence Award
To be eligible for the Chairman’s HSE Excellence
Award, teams must have met the enterprise
HSE goals for the last three years, have taken
action to advance the HSE culture, and have
accomplished a significant HSE achievement.
The five teams selected to win the Chairman’s
award receive a USD 10,000 prize to spend
on a reward of the team’s choice. In 2014,
for the first time, select employees from each
winning team will participate in a special
celebration dinner with Martin Craighead. Local
celebrations will also be held for the winning
team from each region and business segment.
Europe / Africa / Russia, Caspian Region Sakhalin Island, Russia – Completions Systems
Global Products and ServicesNavigation Manufacturing Facility, Houston, Texas, U.S.
Latin America Region Lagomar Base, Macaé, Brazil
Middle East / Asia Pacific Region Pakistan
North America Region Trinidad
Nineteen teams applied for the 2013 Chairman’s HSE Excellence Award. The five winning teams are as follows.
Section 6
612013 HSE Annual Report
Baker Hughes employees continue to garner HSE recognition
from customers and industry groups. Within the company, we
encourage stellar HSE performance through recognition programs
such as the annual Chairman’s HSE Excellence and the President’s
HSE Recognition award programs.
62 Baker Hughes Incorporated
Examples of selected team accomplishments are
highlighted below.nn The Navigation manufacturing facility, with
more than 500 employees, has accrued
more than 12 million man-hours – 8 years –
without a Days Away From Work case and
more than 1.5 million man-hours since the
last recordable injury.nn Two new pressure test bays installed at the
Pine Island, Texas ballistics manufacturing
facility enable test fluids to be recycled and
reused, reducing water consumption and
eliminating a hazardous chemical waste.nn The Pakistan team organized a family HSE
excursion to Murree Hills. The journey
presented opportunities for coaching on
driving safety, and increased awareness
about the environment.
New President’s HSE Recognition Awards
In 2013, two new President¹s HSE Recognition
Awards programs were established to recognize
and celebrate teams of 50 or more employees
that achieved 365 Perfect HSE Days. nn 2013 President’s Perfect HSE Day Awards.
Teams that achieved 365 Perfect HSE Days
in 2013 were recognized with this award. nn 2013 President’s HSE Performance Awards.
This award is presented to teams that
achieved 365 Perfect HSE Days in 2013,
demonstrated HSE excellence according
to a number of leading indicators, and
accomplished a significant achievement.
Up to five of the top performing teams are
recognized in each region.
More than sixty teams applied for the
President’s Perfect HSE Day Awards, and
38 teams applied for the President’s HSE
Performance Awards. Fig. 1 shows the regional
distribution of teams that achieved 365 Perfect
HSE Days.
Figure 1. Regional distribution of teams that achieved 365 Perfect HSE Days
Middle East / Asia Pacific 32%
Global Products and Services 30%
North America 15%
Latin America 13%
Europe, Africa, Russia, Caspian 10%
Malissa Boudreaux, Country Director Qatar accepts
the 2013 Chairman’s HSE Excellence Award from
Dmitry Kuzovenkov, Vice President HSE on behalf of
Baker Hughes Qatar
Recognition
632013 HSE Annual Report
Customer recognition
During 2013, our customers recognized Baker
Hughes employees for HSE excellence.
In June, our steadily maturing safety culture was
recognized by TOTAL at their HSE Forum 2013
in Paris. In the HSE Commitment category, Baker
Hughes received an award for our Organizational
Ownership of HSE Interdependency program.
Our Africa region was specifically cited for the
HSE Leadership Academy series, which reduced
injury rates 49 percent and vehicle accident rates
63 percent. Baker Hughes was one of only three
companies presented with an HSE award, and
was recognized from among 75 of TOTAL’s top
suppliers before 250 industry peers.
At the Shell Global Wells Conference in
November, Baker Hughes received a 2013 Best
HSE Performance award for our role in reducing
injuries and our commitment to process
safety. For this award, Shell evaluated key HSE
performance indicators such as total recordable
incidents, dropped objects, and Shell “Life
Saving Rules” violations.
Earlier in the year, Shell challenged all its service
contractors and other groups to develop a
creative, light-hearted video to promote process
safety. Baker Hughes accepted the challenge
and filmed a musical number Think Process
Safety! at our Beta Rig in Tulsa, Oklahoma. A
panel of Shell executives awarded the Baker
Hughes video second place in the contest.
“There was a lot of thoughtful work that went
into the Baker Hughes video, and it does a
great job of promoting wellsite process safety
to the viewer in a memorable way,” said
Andy Shaw, Baker Hughes Vice President of
Marketing, Asia Pacific region.
Jack Hinton, Vice President, HSE, (right) accepts the
Organizational Ownership HSE award from Marc Blaizot,
Senior Vice President Exploration, TOTAL
Belgacem Chariag, Baker Hughes President, Global Products
and Services (left), and Sam Zettle, Vice President, Shell
Accounts (right), accept the 2013 Best HSE Performance
award from Gordon Graham, VP HSE, Shell (center)
64 Baker Hughes Incorporated
In, March, Baker Hughes employees in
Mauritania celebrated their contribution to
achieving 2,500 days without a lost time
accident with PETRONAS.
Baker Hughes Service Supervisor Craig Morris
received a Chevron Outstanding Supervisor
award for his work on the Barrow Island
Gorgon project in Australia. Craig was
presented with the award for his continuous
efforts towards an incident- and injury-free
work environment.
In March, our Papua New Guinea Drill Team
was awarded the ExxonMobil First Quarter
2013 Environmental Leadership Award. The
award recognizes drill teams that exhibit
the leadership, actions, and results that
distinguish them as role models in progressing
ExxonMobil’s objective of protecting the
environment. The Baker Hughes team was
presented with the award for their excellent
HSE performance in blending, transporting, and
displacing 7,000 bbls of drilling fluids with no
spills and implementing plans for reducing the
environmental footprint during operations.
Other notable events
In October, Baker Hughes won the Oil and Gas
Awards, West Coast Region Environmental
Initiative of the Year award. The award was
earned for our energy-conservation initiatives,
including the application of an alternative
energy fuel cell at our new 70-acre campus in
Shafter, California. This Baker Hughes facility
is the first industrial site in the country to
incorporate the specific alternative energy fuel
cell technology, which generates electricity from
a chemical reaction rather than combustion
and therefore generates significantly lower
greenhouse gas emissions.
Craig Morris (right), accepts the Outstanding Supervisor
award from Steven Paterson, HSE Advisor at Chevron
(Gorgon Upstream Facility Team)
Aguibou Ba, Baker Hughes Workshop Supervisor, and Tayeb
Jeddou, Baker Hughes Chemicals Operations Coordinator,
proudly pose with the PETRONAS Award
Recognition
652013 HSE Annual Report
The Society of Chemical Manufacturers and
Affiliates (SOCMA) awarded Baker Hughes
ten performance improvement awards in
2013, sponsored by SOCMA’s ChemStewards®
program. This program promotes a
manufacturing facility’s commitment to
continuous improvement, outstanding HSE
and Security performance, and educational
outreach. The following awards were presented
to Baker Hughes locations.
Baker Hughes, Taft Manufacturing
Company, California nn Silver winner – Stakeholder
Communicationsnn Silver winner – Product Stewardship
Baker Hughes, Rayne Blend
Facility, Louisianann Silver winner – Product Stewardshipnn Silver winner – Resource Management and
Waste Minimization
Baker Hughes, Kilgore Blend Plant, Texasnn Silver winner– Environmental, Health,
Safety and Security in Planning
and Operations
Bronze winners: nn Bakersfield Blend Plant, Californiann Barnsdall Manufacturing, Oklahomann Houston Blend Plant, Texasnn Bayport Manufacturing, Texasnn Sand Springs Manufacturing, Oklahoma
Ralph Crabtree, Vice President, Real Estate (2nd from left) and Will Harvey, Manager, Shafter, California (2nd from right)
accept the West Coast Region Oil and Gas Award for Environmental Initiative of the Year from Daniel Creasey and Andrew
Perry of Oil and Gas Awards
66 Baker Hughes Incorporated
Looking Forward
Baker Hughes 2014 expectations
and targets
Each year, we establish our company
improvement goals following a critical evaluation
of our current HSE performance and overall
business strategies. The intent is to focus on
those improvement areas that will provide the
greatest return so we can further safeguard our
employees, communities and the environment.
We continue to embrace the “Perfect HSE Day,”
moving from using the traditional goal approach
to setting expectations.
Our overarching HSE expectation is to “Make
Every Day a Perfect HSE Day” and thus be
recognized as the industry leader in
HSE performance.
This is achieved through the following.nn Zero Serious Injury or Life Rules! Events nn Zero Process Safety Eventsnn Zero Serious Spillsnn Zero Serious Motor Vehicle Accidents
To drive performance and accountability, we
will track nine key HSE performance metrics.
Metric Target
Total recordable incident rate (TRIR)
10% reduction
Days away from work case rate
10% reduction
Short service employee TRIR
10% reduction
Motor vehicle accident rate
10% reduction
Energy/greenhouse gas emissions/water use
10% reduction
Volume of serious spills 10% reduction
HSE observations 20% increase
Reporting of near misses (including process safety)
75% increase
Reporting of all upstream process safety barrier failures
100%
An enterprise dashboard comprised of key
metrics, including HSE leading indicators, now
provides wider visibility to all employees and will
act as a guide to direct local efforts. As these
expectations and metrics show, our heightened
focus on process safety will continue.
Section 7
672013 HSE Annual Report
Each year, we assess performance and set new priorities. It is our
vision that 365 Perfect HSE Days in a single year is possible. With
visible leadership and the daily efforts of all our employees, we
have become a sustainable company that protects our people, our
assets, the environment and the communities in which we live
and operate.
68 Baker Hughes Incorporated
Glossary
Baker Hughes Operating System (BHOS)
An enterprise-wide, integrated management
system that drives the consistency of and
conformance to Baker Hughes policies,
processes and procedures to comply with
our established objectives, enable flawless
execution and satisfy customers’ needs.
Bow-Tie Analysis
A risk assessment tool used in process safety
management for communicating risks to
people and the environment by clearly showing
the links between the potential causes of a
major incident, the barriers and controls to
prevent or mitigate such incidents, and possible
consequences.
Days Away From Work Case (DAFWC)
Any occupational injury or illness that renders
the affected person temporarily unable to
return to the workplace in any capacity on one
or more subsequent days after the day of
the injury.
Days Away From Work Case Rate
(DAFWCR)
Number of days away from work cases x 200,000
Total number of man-hours worked
First Aid Case
Any work injury that results in a one-time
treatment and any follow-up visit for the
purpose of observation—such as minor
scratches, cuts, burns, and splinters—that does
not ordinarily require medical treatment. Injuries
requiring only first aid are classified in Odyssey
as nonrecordable occupational injuries.
GreenLink
Software used at Baker Hughes to track
environmental performance indicators since
2008 to assist with measuring our overall
environmental footprint and progress on our
environmental goal.
Hazardous Waste
All waste defined as hazardous, toxic,
dangerous, listed, priority, special, or some
other term defined by an appropriate country,
regulatory agency, or authority. Basically,
hazardous waste means “as defined” by
legislation at the point of origin.
Incident
A negative event that causes or leads to an
operational interruption, disruption, and/or loss.
An incident can be classified as an emergency
or as a crisis.
Section 8
70 Baker Hughes Incorporated
Interdependent HSE Culture
In an interdependent HSE Culture, the
organization “owns” HSE, employees believe
all injuries can be prevented, and zero
incidents are an expectation. This culture is
characterized by: cooperation within and across
teams; organizational pride; employees fully
engaged in goal-setting and improvements;
management comfortable leading or allowing
others to lead; and employees looking after
each other’s safety.
In-Vehicle Monitoring System
An on-board monitoring system that monitors
and records vehicle speed, acceleration, and
deceleration.
Light Vehicle Accident
A light vehicle accident is a vehicle accident
resulting in property damage, vehicle damage
not requiring tow-away, or injuries not beyond
First Aid.
Major Vehicle Accident
A motor vehicle accident resulting in a rollover
or lost work day/employee injury.
Medical Treatment Beyond First Aid
Any work injury (or illness) that requires medical
treatment beyond that considered as first aid
and does not result in days away from work or
a transferred/restricted work case.
Motor Vehicle Accident
A motor vehicle accident is any vehicle
accident that occurs in a company vehicle or
any vehicle (at any time) while conducting
company business. These accidents typically
include: vehicle accidents resulting in third-
party injuries; rollovers; personal injuries
classified as recordable; and vehicles being
towed from the scene.
Motor Vehicle Accident Rate (MVAR)
Number of motor vehicle accidents x 1,000,000
Total number of kilometers driven
Motor Vehicle Crash
A motor vehicle crash is a motor vehicle
accident that occurs while conducting company
business. These accidents typically include:
vehicle accidents resulting in third-party
fatalities; rollovers; personal injuries classified
as recordable; and vehicles being towed from
the scene. Motor vehicle crash is an industry-
wide term established by the International
Association of Oil and Gas Producers.
Motor Vehicle Crash Rate (MVCR)
Number of motor vehicle crashes x 1,000,000
Total number of business kilometers driven
Normalization
The intent of normalization is to give an
accurate determination of intentional vs.
circumstantial reduction by adjusting the actual
quantity to account for changes in economic
activity, which may affect generation (such as
waste) or use of a material (such as energy).
The normalization basis is typically a numerical
value, which is tracked for some measure of
activity, such as revenue, production data
(pounds of material produced), number of
containers cleaned or other factors.
Glossary
712013 HSE Annual Report
Noteworthy Efforts
These are identified during HSE&S MS
audits to highlight and share outstanding
or extraordinary efforts and promote a
positive perception of the audit process. To
be considered noteworthy, HSE efforts must
exceed Baker Hughes requirements or represent
a unique solution to a particular challenge.
Odyssey
Odyssey is an enterprise-wide, web-based
application to record, categorize, and
communicate incident details, investigation
elements, and corrective actions surrounding
work-related HSE&S incidents.
Perfect HSE Day
The goal at Baker Hughes is to make today,
and every day, a Perfect HSE Day. We define
a Perfect HSE day as one without a recordable
injury or illness, serious environmental spill or
release, and motor vehicle accident across
the enterprise.
Process Safety
A disciplined framework for managing the
integrity of systems and processes involving
hazardous substances. It is achieved by applying
good design principles along with sound,
engineering, operating and maintenance
practices. Process Safety is intended to prevent
and control events that have the potential
to release hazardous materials including
hydrocarbons, and energy. Such events can
result in toxic exposures, fires or explosions,
and could ultimately result in serious incidents
including fatalities, injuries, property damage,
lost production or environmental damage.
Recordable Incidents
All work-related injuries or illnesses that result
in fatality, days away from work, transferred or
restricted work, medical treatment beyond first
aid, or that involve loss of consciousness. First
aid injuries and near misses are not considered
recordable incidents.
Short-Service Employee (SSE)
For statistical reporting purposes, an SSE is any
Baker Hughes employee with less than one year
of service.
Superfund
The common name for the U.S. environmental
law officially known as the Comprehensive
Environmental Response, Compensation, and
Liability Act (CERCLA), which was created in
response to heavily contaminated toxic waste
sites. Sites listed on the Federal (Environmental
Protection Agency) Superfund National Priority
List or on state lists are generally referred to
as “Superfund sites.” The term superfund is
derived from the trust fund established for
cleanup at sites where no viable responsible
parties could be identified. This trust fund was
made up of several billion dollars from
taxes assessed on the chemical and
petroleum industries.
Total Recordable Incident Rate (TRIR)
Number of recordable incidents x 200,000
Total number of man-hours worked
72 Baker Hughes Incorporated
Baker Hughes Climate ChangePolicy Statement
Baker Hughes is committed to managing the risks associated with climate change. This commitment supports our global Health, Safety, Environment & Security Policy to ensure environmental protection across all company operations. Key elements of this climate change policy are as follows:�� Compliance with all relevant legislation, associated guidance, and international, national, and industry standards
�� Conservation of energy through the use of energy-efficient equipment, implementation of best practices, and increasing the use of alternative and clean energy
�� Minimization of greenhouse gas emissions, including a commitment to support the generation of geothermal energy through technology innovations and our service offerings
�� Setting measurable goals and plans to improve performance and reduce our overall carbon footprint
�� Mitigation of the effects of drought through the conservation of water
�� Collaboration with stakeholders including customers, regulators, contractors, suppliers, and other partners to reduce impacts from climate change
�� Promoting these Climate Change Policy elements with our suppliers/vendors and partners
�� Public reporting of performance information on greenhouse gases and other climate change risks
�� Review and audit of systems and performance data, including the use of third-party audits when necessary
The Vice President of Health, Safety, and Environment is responsible for establishing and implementing this policy. Performance results are reported to the Board of Directors, which provides oversight of the program to reduce HSE risks, including those related to climate change.
This policy is made available to employees, customers, contractors, suppliers, and the public.
Dmitry Kuzovenkov Vice President Health, Safety, and Environment Baker Hughes Incorporated
©2014 Baker Hughes Incorporated. All Rights Reserved. 38368 02/2014
Glossary
732013 HSE Annual Report
Health, Safety, Environment, and Security Policy Statement
Baker Hughes policy is to conduct business in a manner that protects people, assets, intellectual property, and the environment. This commitment is facilitated through a management system for Health, Safety, Environment, and Security that promotes:�� Line management and employee accountability, commitment, and individual contribution
�� Measurable goals and plans for continual improvement aimed at zero incidents; conservation of energy, water and other resources; reduced emissions; and the prevention of pollution
�� Integration of Health, Safety, Environment, and Security matters into all business activities
�� Identification and effective management of Health, Safety, Environment, and Security risk
�� Provision of training, controls, and protective measures based on sound assessment of personal health and safety, equipment and process safety, workforce and asset security, and environmental and social responsibility
�� Collaboration with customers, regulators, contractors, suppliers, and community leaders to improve overall performance
�� Compliance with applicable legislation, regulations, and industry standards
�� A culture where Stop Work is an individual obligation and a company responsibility
�� Asset integrity (traceability and preventative maintenance), equipment design, and lifecycle management
�� Audit and review of systems and communication of performance
�� Understanding of crisis alert levels, response plans, and the crisis management process
�� Protection of all Baker Hughes intellectual property
�� Allocation of appropriate resources to implement this policy�� Baker Hughes is a responsible corporate citizen committed to the protection of people, the environment, and company resources, while supplying products and services in a sustainable manner. This commitment adds value to employees, customers, shareholders, and communities.�� This policy is made available to employees, customers, contractors, suppliers, and the public.
Martin S. Craighead Chairman and Chief Executive Officer
©2013 Baker Hughes Incorporated. All Rights Reserved. 28544 REV 12 07/2013