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Surviving in the oil patch.

CRISIS MANAGEMENT IS SOMEthing that is of far greater concern to a company like ours because it can bankrupt us if it is not handled well," explains Lorne Earle. He should know. He's the corporate security director of Petro-Canada-Canada's largest domestically owned and controlled oil company.

Created in 1975, Petro-Canada today has assets of more than $6 billion (Canadian) and in 1990 reaped a revenue of nearly $5 billion. The company, headquartered in Calgary, develops oil and natural gas and operates 3,200 retail gas stations in Canada. It owns four refineries and explores for gas in such far-flung countries as Vietnam, Yemen, and Colombia.

Despite these tantalizing figures, Petro-Canada has been affected by the recession that has hit companies worldwide. A preliminary prospectus filed in May this year noted that Petro-Canada suffered a $52 million loss in the first quarter of 1991 compared with a $40 million profit a year earlier.

One major effort to alleviate the effects the poor economy has had on the company took place this past summer, when the government put 20 percent of the company's shares on the market to pay down Petro-Canada's short-term debt to remain healthy.

Another effort comes from PetroCanada's security department. Earle and his team of security professionals have their own techniques for weathering this recessionary crisis and boosting the company's image. His agenda includes safely maintaining all home and foreign operations, protecting executives, managing industrial disputes, investigating losses, managing crises, and dealing with disgruntled employees. WHAT EARLE HAS DONE IN HIS REALM OF responsibility is to make security an integral part of all operations. Integrating security "also makes for an interesting potpourri of assignments as we move through the evolution of the company," he adds. His staff is made up of advisers, consultants, investigators, technologists, and a proprietary guard force.

"Our approach is a blended approach. We out-source any additional needs," Earle explains. "If we need surveillance or additional investigators for international support, we hire individuals or other security firms. For example, we have several individuals that we can call when we need to in Colombia, Pakistan, or here at home in Canada."

The key to security operations at Petro-Canada is to be strategic, efficient, and low-key. No matter what the operation or problem, the security personnel gather the facts, recommend a course of action, and then step back and help manage the situation.

Take Petro-Canada's operations during the Persian Gulf War. The company had ongoing operations in Jordan and Yemen during the war, with several drilling operations on the Iraqi border.

"We had to go in and survey those facilities, determine where the risks were, and determine what to do if personnel couldn't evacuate in time," Earle explains. "We set up procedures for maintaining personnel in the area as well as getting them out. Despite the threat, we were able to maintain operations throughout the war."

Earle's security team prepares evacuation plans for every country Petro-Canada does business in. "The Gulf War was merely one example," Earle adds. Operations in Pakistan have required different crisis management strategies.

According to Earle, Pakistani bandits pose a relentless problem for the indigenous population as well as temporary residents. "In those places we've been faced with kidnappings and local disturbances where shots have actually

been fired. So we set up our employees' security arrangement, which includes, among other procedures, risk assessments and guard force support."

Petro-Canada employees based at foreign operation sites also receive an intensive security briefing. "These briefings not only include security but also a full cultural and political review of the area," stresses Earle.

Also included in the briefing are hostage survival skills for employees and their families. "If any problems arise," continues Earle, "they can phone a 24-hour number to Canada, and my people will respond."

Personnel turnover is another concern for Petro-Canada's security department. A newspaper headline such as "Petro-Can Slashes Staff Prior to Public Filing," which appeared in the April 30, 1991, issue of The Toronto Star, doesn't exactly ease the tension. According to that article, Petro-Canada took steps in April to become "leaner and meaner by laying off up to 300 people."

These cuts, which were made mainly in the company's refining and marketing operations, are actually the second round of cuts in less than two years. According to The Toronto Star, PetroCanada cut 1,020 jobs in the fall of 1989 from the corporate services sector.

Though the numbers may seem high, Earle remains confident in the manner in which the company handles layoffs: "Nowadays people are laid off with quite respectable severance packages. The terms under which they leave are often quite attractive. Our company particularly has become so skilled in the downside of these exercises that we seldom have any widespread problems."

Most of the oil patch is not unionized, continues Earle. A few unions do exist but, he adds, they don't traditionally engage in strikes or aggressive negotiating.

"The problems we encounter involve interunion rivalry," he explains. "For example, several years ago in Montreal, one union attempted to take over the labor force of another union. PetroCanada, as [the second union's] employer, ended up being targeted for some dramatic and disruptive tactics," which included storming the executive offices and threatening personnel there.

A leading concern for many companies involved in mining and drilling natural resources is the growing number of extremist environmental groups. "Oil companies generally have set up well-equipped environmental departments that look after environmental behavior to make sure the company doesn't pollute," notes Earle. "We want to keep the environment as clean as possible.

"We're also very conscious of the need to protect our workers and to work safely. It's good business to keep workers healthy and it's good business to work safely so they don't have any downtime. Security plays a role in all that." Earle adds that Petro-Canada works hard to meet the government's occupational health and safety standards to ensure that workers are not harmed by their work environment.

Interestingly, the primary concern in the oil patch is not with the environmentalists as much as it is with native groups. Who owns the land is the primary issue.

"Some of our drilling activities take place on remote, pristine properties," explains Earle, "and we've had some problems where there have been disputes between native Indians and the government over aboriginal rights to the land. In these cases we have 'stood down' operations-we stop drilling and production and work with the parties involved to achieve a solution to the crisis."

Oil spills are a crisis situation, of course, on everyone's mind, especially after the debacle of the Exxon Valdez. Petro-Canada, Earle counters, is ready to act, and a crisis management team is ready-a team with experience that spans the oil industry.

"Several companies, the government, and regulatory agencies will get together-as integrated operating teams-and create a disaster plan," explains Earle. "We have plans and organizational structures in place, right down to the lowest level. If there's a spill, it's taken care of.

"We don't pretend that that kind of planning is perfect or 100 percent complete," he continues. "But it's obvious that working together helps the whole industry. It doesn't matter who caused the problem because we all have to clean it up or else the industry will suffer." WITH 6,350 EMPLOYees spanning operations from marketing to lubricant supply, from refining to distribution, one would think that Petro-Canada would find preemployment drug screening a pressing issue. But it is exactly on this issue that Canadian companies stand apart from their American counterparts.

Earle explains: "The political, social, and legal infrastructure in Canada is different from the United States. In the United States, you have the moral injunction from the president to get on with drug testing to stop the drug problem. In Canada, to conduct any form of drug testing is viewed as an intrusion on human rights.

"I'm against drug screening," admits Earle. "Many of my American colleagues have heart attacks when I make this kind of statement. I believe that the drug problem in Canada is serious but would more appropriately be addressed if a medical model was used. Substance abuse is a medical issue, not a security issue.

"The United States may have a different set of problems that drive substance abuse, such as organized crime," Earle observes. "So many US corporations approach substance abuse from a security perspective.

"In Petro-Canada," he continues, we approach it as a medical issue, and we don't single out drugs. We look at alcohol, smoking, and any other addictive substance as a problem to be dealt with in much the same fashion. We need to get at the reasons why people are abusing these substances."

A number of sticky situations have occurred as a result of this policy. Some US companies, notes Earle, have attempted to impose their drug screening policies on their Canadian operations. "As a consequence, Petro-Canada is currently faced with cases before the human rights tribunal in which the individuals involved are alleging intrusion on human rights."

Beyond drug screening, Petro-Canada's policy for preemployment background checking is similar to that of its southern neighbor, except for one aspect. Earle explains: "Once again my American colleagues will probably throw up their hands in despair. We need to look on the hiring as primarily a human resources function. It is human resources' responsibility to check references, check individuals' credit, and verify statements made on applications, not security's."

Another aspect of employee management for which Petro-Canada security uses a hands-off policy is searches. "I personally do not support corporate security groups bringing in search teams, dogs, etc. I think it's alarming to people."

Instead, Earle calls in the Royal Canadian Mounted Police (RCMP) to investigate. "The RCMP investigates our suspicions on their own authority. I think this prevents abuse.

"We've had some horror stories," relates Earle, "where the security people on an oil rig will hire a private contract group that flies five or six people with three or four German shepherds in a helicopter onto a rig. This is almost a Vietnam-style attack and does not go over well with the personnel on-site. They view this as a terrible intrusion. You have an aftermath of problems that are worse than what you were trying to solve in the first place. Instead, we concentrate on security education as a more viable, productive measure."

Earle's consultative approach is replicated in the corporate setting, too. Take the handling of proprietary information, for example: "We avoid the rigorous security classification of documents that is the hallmark of government," he explains. "We avoid bureaucratizing things. We avoid creating a rigid and inflexible policy. We don't require extensive policies, procedures, and guidelines. It's the responsibility of the people who are working in a particular field to take the necessary measures to protect the information. We provide support by first surveying the operations and then recommending measures to take.

"The greatest danger to proprietary information in the past decade," Earle says with chagrin, "has been from disgruntled employees who have taken information that they have been trusted with and passed it off to the media or others."

Though unwilling to discuss specific countermeasures used to fight this threat, Earle admits he has put into effect a program to deal with such problems: "The fact that we do it is probably enough said. What we do and how we do it is proprietary."

Despite Petro-Canada's budget cuts and downsizing, Earle's security operation has helped improve the company's image and operations. "Security has become stronger and stronger in terms of its value added to the corporation. It's not an easy task. It's a matter of improving the quality of the services that are already offered. You have to be flexible and adapt to the changes the company goes through. If you don't, you'll perish." Joan H. Murphy is associate editor of Security Management.
COPYRIGHT 1991 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Special Issue; Petro-Canada Ltd.'s safety and security measures
Author:Murphy, Joan H.
Publication:Security Management
Date:Nov 1, 1991
Previous Article:Maximizing security with quality assurance programs.
Next Article:What can you ask?

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