London, 18 August, 2010 - A new study reveals that many players within the oil and gas industry supply chain – which includes oil companies, contractors and sub-contractors – underestimate the full extent of the risks that HIV/AIDS, TB and malaria pose to its workforce, productivity and profitability.
- Greater collaboration between industry players is needed
- Adequate HIV, TB & Malaria Management & Prevention remains a key health issue for the Oil Industry
- Clear Opportunities for disease management and prevention outlined in new Booz & company and Global Business Coalition (GBC) report
The study – conducted by management consultants Booz & Company in partnership with the Global Business Coalition (GBC) – outlines that nearly 25% of oil contractors said they have never had any explicit interaction with their clients (oil majors) on HIV/AIDS, tuberculosis (TB) or malaria. It highlights that the oil and gas industry should improve its understanding of the hazards posed by these three epidemics and makes ten recommendations for how to make the health of their employees a priority.
Report Reveals Faulty Perception of HIV, TB, Malaria Risk Not in Line with Reality
The report found that health issues lag behind safety as the top priority for oil companies and their contractors. Oil and gas companies base their engagement initiatives on their perception of risk levels in health, safety and the environment issues. While safety issues are perceived to have the greatest risk, the perception of HIV, TB and malaria risk for companies with significant operations in disease-endemic regions is not often in line with actual prevalence and incidence rates.
Many major oil and gas companies work in less developed regions of the world – such as West Africa and Asia – where HIV, TB and malaria are highly problematic health issues that can pose a strong risk to worker productivity. Oil and gas activity is likely to increase in many of these regions over the next decade. The industry employs tens of thousands of young, male, migrant labourers who work on a temporary contract basis at remote project sites that lack adequate housing, healthcare and transport – conditions that contribute to the transmission of these diseases
Seventy-five percent of those infected with HIV/AIDS are located in Sub-Saharan Africa, a key area of industry operation, and the virus is a growing problem in other major countries of industry operation such as Russia and China. The HIV epidemic has helped contribute to the resurgence of TB, which is the leading cause of death in HIV-positive individuals in Sub-Saharan Africa. In addition, malaria outbreaks have been known to derail progress on large scale projects.
According to the Booz/GBC study, risk perception was rated as the most important driver behind health priorities by both the oil companies (50 %) and their contractors (71 %). However, HIV, TB and malaria were not present in any of the interviewees’ top five most pressing health issues at a global level. Instead, issues such as stress, obesity and heart disease were a greater priority.
“HIV/AIDS, TB and malaria pose a clear and present risk to the energy industry supply chain, yet many companies do not fully appreciate the nature or extent of this looming challenge,” said Shuma Panse, GBC senior manager for membership and advisory services, and an author of the study. “The good news is there are easy and affordable ways to protect workers and company productivity. The first step is understanding the risk, and engaging with the majors. They can even make an effective worker HIV/AIDS policy a contractual requirement of doing business.”
Major Oil Companies Taking Steps to Promote Health, but Action is Lacking in Supply Chains
The Booz/GBC study revealed that while several major oil companies are taking some proactive steps to protect their workforces from these diseases, the same cannot be said for their supply chains – compromising the work that the majors are doing.
Of oil companies, 25% have no HIV programmes in place and 25% offer no HIV programmes to their contractors. In contrast, 35% of contractors have no HIV programmes and 53% offer no HIV programmes to their sub-contractors.
All oil companies surveyed stated that they either always or sometimes monitor their contractors on HIV, TB and malaria management but only 35 % of contractors said they never monitor their sub-contractors on these issues.
“Oil companies are ahead of the curve in developing HIV and malaria programmes, but the contractor community has not been as active,” said Jake Leslie Melville, Booz & Company Partner and an author of the study. “Further, our survey found that the sub-contractor community is the most poorly served in terms of disease prevention and management programmes, yet it is this community that is at the greatest risk.”
Study Outlines 10 Recommendations for Greater Prevention and Management of Health Epidemics
As a result of the findings, the Booz/GBC study concluded that the oil and gas industry has the capacity to make an enormous impact on HIV, TB and malaria and proposes 10 key recommendations for greater prevention and management of these epidemics.
The study recommends that all players in the oil industry supply chain:
- Develop an adequate understanding of disease-risk profiles and develop programmes accordingly;
- document the impact of HIV, TB and malaria on worker productivity;
- increase company/contractor/sub-contractor interaction in developing programmes and sharing best practices;
- increase the use of company-driven contractual clauses and incentivise contractors and sub-contractors to prioritise HIV, TB and malaria management;
- develop contractual clauses from a collective industry perspective, with standardised language or a universal clause that would help contractors translate a mandate into action and
- develop a standard mechanism for auditing contractual compliance.
It also recommends that industry bodies focus their research on the sub-contractor community in order to better understand pressures they face as well as extend research to financing institutions. And, for financing institutions, the study recommends increasing the prevalence of financing institution-driven contractual clauses.
Booz & Company and GBC invited 34 oil companies and services contractors to complete a survey regarding HIV/AIDS, TB and malaria activity and also to participate in a one-to-two hour structured interview. Companies were selected based on their inclusion either in the Global or Fortune 500 lists and were prioritised with a geographic focus on Africa, Russia or China. A GBC member company also distributed surveys to its global suppliers. Interviews were conducted by Booz and GBC staff members with both industry and disease-specific expertise.
The report “HIV, TB, and Malaria Management & Prevention in the Oil & Gas Supply Chain” is available to download (PDF 2.9mb >).
About The Global Business Coalition
The Coalition is a movement of businesses that bring private sector assets and expertise to the fight against HIV/AIDS, tuberculosis and malaria. By joining forces with governments, international agencies and non-profits, we will reach more people, more quickly, more effectively. Through the Coalition, companies focus their capabilities on areas of greatest impact; develop partnerships and collaborations across the public, private and non-profit sectors; and exchange best practices and knowledge. The Coalition has more than 200 corporate members and a close-knit network of non-corporate partners. For more information, visit www.gbcimpact.org.