Helicopters (North Sea)

Debate between Tom Clarke and Frank Doran

Wednesday 27th November 2013 Westminster Hall

[Mr Frank Doran (Aberdeen North) (Lab)]

It is a pleasure to be here under your chairmanship, Mr Dobbin. This is a short debate, which I intend to use to put on record the major reasons why the Department for Transport should order a public inquiry under the Inquiries Act 2005 into the offshore oil and gas helicopter transport system.

The North sea oil and gas industry is crucial to the UK economy. The industry and its supply chain claim 440,000 employees, around 30,000 of whom work offshore. Its investment this year will be in excess of £13 billion. It is an extremely important industry. Because of the hostile environment of the North sea, the only reasonable method of transport to and from offshore installations is by helicopter. Since 1976, there have been 13 helicopter-related incidents, in which 118 people have died. In addition to those, there were a further seven fatalities in an incident in Morecambe bay in 2006.

In the past four years, we have had five separate incidents. In three of those, the helicopter ditched in the North sea, thankfully without any fatalities, but on 1 April 2009, 16 people died when a Super Puma L2 aircraft crashed near Peterhead, and on 23 August this year, four people died when a Super Puma AS332 crashed off Sumburgh. In all five incidents, various models of the Super Puma aircraft were involved. That aircraft is the workhorse of the North sea industry, and it should be no surprise that those successive incidents have wrecked the morale and confidence of offshore workers and their families, as shown by a recent survey undertaken by Unite the union.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I am grateful to my hon. Friend for giving way. I declare an interest, in that my nephew, Alan Lawson, was involved in a helicopter crash on 18 February 2009. The helicopter landed in the North sea in the most dreadful conditions. Fortunately, all the people on the helicopter, including Alan, survived, but I want to congratulate my hon. Friend on pursuing these matters as tenaciously as he is, because I know from the sidelines of the terrible trauma that the family of that young man—my sister’s son—experienced. The matter still has not been resolved, and I want my hon. Friend to be reassured that there is great support for the marvellous work that he is doing.

[Mr Doran]

I am grateful to my right hon. Friend for those remarks—I promise I did not pay him.

There are many reasons why an inquiry is necessary, but I will focus on three principal reasons. First, the relationship between the oil industry and the helicopter industry needs to be considered in some detail. The Competition Commission carried out an inquiry into the industry in 2003 and recognised at that time:

“Oil companies are much larger and commercially stronger organisations than the helicopter operators”,

and

“oil companies had become more determined to force down their supply costs.”

That statement is accurate, but it is an understatement of the true position. The contracts reached by the oil industry with helicopter and other service companies are very one-sided. The contractor has obligations for a period. In the case of the helicopter operators, it is usually for five years, whereas the oil majors can change the contract terms at any time. When the oil price dips, oil companies look at their supply contracts. In the late 1990s, when the oil price was consistently low, many supply chain companies, including helicopter operators, had their contracted prices cut severely. In one helicopter company with which I had discussions, the cut was 20%. Something similar happened five or six years ago when the oil price dropped again. The practice is common in the North sea, but it is very difficult to see how a helicopter company, when its prices are cut without notice to that extent, can respond and at the same time maintain the maintenance and other costs that are crucial to the safety of the service.

I do not know whether the Civil Aviation Authority is aware of that practice. It should be, because significant cuts in income and elsewhere could severely restrict an operator’s ability to maintain safe standards. We should all know whether the CAA takes into account the huge imbalance between the oil industry client and the helicopter operators.

Given the importance of the transport industry in the North sea, it does not seem appropriate, at least to me, that the helicopter companies are treated in exactly the same way as any other supplier. The service is far too important. The huge imbalance between the oil and gas companies and the helicopter contractors should not be allowed to prejudice safety. The relationship should be subjected to the most intense scrutiny. Given the recent international agreement with Iran, a drop in the oil price is foreseeable when Iranian oil comes back into the market. It is worth emphasising that as a good example of how volatile the oil price can be.

The second issue to consider is the significant disparity in how different helicopter companies operate, particularly in how helicopters are maintained, the training of engineers and other staff and company cultures generally. I have spoken with a number of employees of different companies, and it is clear that training regimes, the number of flight hours and procedures vary considerably between companies. This is not the place to go into that in detail, but the available evidence suggests that the CAA should be taking a stricter line in its scrutiny of individual companies, their practices and their safety culture.