Alyeska Pipeline ordered work stopped on a project to upgrade the control systems for the Remote Gate Valves on Thursday, October 15. Bill Howitt, Sr. Vice President of the Fairbanks Business Unit, ordered the shutdown of the project because of inefficient managment of the project, improper use of Alyeska’s Quality Program, and the potential for a hostile work environment on the project.

“The project wasn’t being managed effectively to achieve the results we required, such as budget, work schedule, work environment, and use of the quality program.” said Howitt. “During the past several weeks, a number of Alyeska and contractor employees have come to me about their concerns with the project and the work environment. I personally checked into it and quickly found confirmation of enough to cause me concern.”

Alyeska Pipeline and the contracting companies working on the project agreed to stop work. The contract companies involved are Houston/NANA (JV), VECO Engineering and VECO Construction, and Arctic Slope Consulting Group, Inspections, Inc.

The project was scheduled to operate through the end of 1998. Currently, the project is scheduled for restart in early 1999. Alyeska and the contracting companies will develop and implement a management plan to assure the project meets the technical and operational standards required by Alyeska before work restarts on the project. An investigation into the incidents surrounding the project has been initated and is expected to be complete in about five weeks.

“This is an important project and I want to complete it. But it is more important to do a good job in a positive work environment. I will not compromise my long term objective of building an open business environment and excellent business processes for the short term outcome of getting a project done,” Howitt said.

Approximately 65% of the contract work force from the project have been or will be reassigned to other jobs on the Trans Alaska Pipeline System.

“I’m really proud of the Alyeska and contractor employees who brought these issues to me and gave me the information I needed to make the right decision,” Howitt added.

A report on the culture and business environment of Alyeska Pipeline Service Company is complete. Alyeska hired Little Harbor Consultants to conduct an independent assessment of Alyeska’s work environment.

The report lists attributes of a healthy, open work environment, assesses Alyeska against those criteria, and makes recommendations to bring about changes in behaviors to achieve these attributes. The findings are in agreement with previous reports by the Joint Pipeline Office and a separate consultant.

Some of the strengths of Alyeska listed by the consultant include the quality of the work force and a universal desire for improvement in the Alyeska work environment.

The report recommended more management accountability in creating an open culture. Included in the comments are the need for a work environment where people feel comfortable raising concerns to their supervisors and the supervisors are able to resolve the concerns. A lack of trust in management was also cited as a critical component of the current culture.

Bob Malone, President and CEO/COO of Alyeska, accepted the findings and is working the Executive Leadership Team to make changes and implement the report’s recommendations. He also commented in a memo to employees, “Our organization is strong enough to make this change. This challenge may not be as visible as constructing the pipeline once was, but it is every bit as difficult. Thank you for working together with me as we learn to change.”

Alyeska Pipeline and the Department of Interior renewed the Native Utilization Agreement (NUA) on Thursday, October 15 during the Alaska Federation of Natives Convention in Anchorage. Deputy Assistant Secretary of the Interior Sylvia Baca was on hand to sign the agreement. Bob Malone, President and CEO of Alyeska Pipeline signed on behalf of Alyeska.

As part of the Federal Grant and Lease of Right of Way for the pipeline, Alyeska agreed to a Native Utilization Agreement which determines the tracking and requirements of the Alaska Native Hire Program at Alyeska.

Noted as the primary change in the NUA, is the addition of the “Gateway” Program. This program allows Alyeska to become a gateway for Alaska Natives into other oil industry companies. Alyeska Pipeline continues to recruit, train and hire Alaska Natives. The Gateway Program allows that if there is not an appropriate job for a qualified Alaska Native who has been through Alyeska’s training programs, a job for that person may be found with one of Alyeska’s contractors or other oil industry companies. The Gateway Program will allow for increased opportunities within the oil industry for Alaska Natives.

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