Transport Committee on April 3rd, 2008

[The Chair (Mr. Mervin Tweed (Brandon—Souris, CPC)), Conservative, Merv Tweed]

Thank you, and good morning, everyone. Welcome to the Standing Committee on Transport, Infrastructure and Communities, pursuant to Standing Order 108(2), the study on rail safety in Canada.

Joining us today is Mr. Paul Miller, who is the vice-president and chief safety officer of CN.

Welcome, and I apologize for the late start. I know you have a brief presentation, and our committee is very anxious to ask questions, so please begin.

[Paul Miller, Vice-President and Chief Safety Officer, Canadian National]

no thisThank you, Mr. Chairman.

Next month will mark my 30th year with CN and my first anniversary as CN's chief safety officer.

I'm very pleased to appear before you today on the issues of railway safety and the Railway Safety Act review panel report. I'll make my remarks very brief in order to maximize your time.

As you know, railroading can be an unforgiving business, with heavy equipment sometimes moving at a high rate of speed on the main track, sometimes carrying products that are deleterious to human health or the environment, and with some of the most challenging weather and geography the continent has to offer.

Nothing is more important to CN than running a safe operation. There are two reasons for this. First, and most importantly, it's because we have a moral obligation to protect the health, safety, and well-being of our employees, our customers, the communities through which we operate, and the environment. But it's also because we simply cannot be successful if we do not operate safely. Any accident or incident has the potential to result in direct costs, delays, congestion, unavailability of people and equipment, and diverted attention. We cannot deliver the service required to maintain or grow our business if we are dealing with disruptions. Thus, safety is an obligation we take very seriously, and it is also good business.

This commitment drives CN's actions with respect to safety, which can be grouped into two main pillars. In the interest of time, I'll give you just a few brief examples of each.

The first pillar is on the technology and investment side. We are reinvesting about $1.5 billion back into the company in 2008, for a five-year total of about $7.3 billion. About 85% of this investment has direct safety benefit: infrastructure renewal, rolling stock acquisition and refurbishment, and systems replacement and upgrades. We're very pleased with the panel's comments about our investments, at page 182 of the report. We're also pleased that our financial performance allows us to continue to reinvest in the industry at a leading rate. We're further increasing ultrasonic rail flaw detection, and we're further increasing the density and capability of our wayside inspection system. These are just a few examples of the things we're doing on the technology and investment side.

On the people and process side, we're investing very heavily in hiring and training. Since the beginning of 2007, we have hired about 3,000 employees, 2,400 of them in Canada. We've spent about $14 million training new and existing employees in Canada, plus another $14 million for replacement salaries while existing employees are on course. We've translated our safety management system into concrete action steps for our front-line managers. We've revised key policies such as train handling and streamlined operations documentation, and we're focusing our field audits on higher-risk activities, territories, and employees.

What are the results of some of these actions?

In 2007, we saw a reduction in total accidents, non-main track accidents, and personal injuries in Canada. Non-main track accidents and personal injuries are typically caused by people and process issues, so we were pleased with that trend. However, we did see an increase in the number of main track accidents, which are typically caused by track, equipment, and weather-related issues. Given that nothing is more important to us than safety, we cannot be satisfied with our performance. One accident of any type is one too many.

In closing, please allow me a few words on the report of the Railway Safety Act review panel.

First of all, CN believes the panel did a rigorous and very fair assessment of the act itself and issues surrounding it. Indeed, while we think a number of the recommendations require more detailed discussion with Transport Canada and the rest of the industry, we don't disagree with any of the 56 recommendations the report contains. We do feel that they had an opportunity to make an additional several, but they did a very professional and thorough job. However, when the panel chair, Doug Lewis, appeared before you last month, he emphasized two points that I'd like to briefly discuss.

The first is CN culture. Much was made, following the release of the report, of the report's brief comments alleging a culture of discipline at CN. I found it interesting to go back and read the report of the commission of inquiry into the Hinton train collision of 1986, which characterized CN's culture at that time as placing insufficient attention on rules observance and tacitly accepting rules violations. That commission noted that the normal practice at that time was not to record first offence rules violations, and it asked out loud how a second offence would ever come to light as a result.

CN has been on a long journey of culture change. We're moving from a culture where both managers and employees sometimes treated standards and policies, even safety-related ones, as options, towards one where all people at all levels of the company will be held responsible for their decisions and their actions. It takes time and can be painful, but it is necessary in order to be successful across all dimensions of our business, including safety.

With all due respect to the panel, we don't accept the notion that this translates into a discipline-based approach to safety. CN believes it is our responsibility to ensure that people are properly trained and equipped, that the work is properly planned and supervised, and that safe work processes are in place.

We also believe that when an investigation of an accident or incident points to a human factor as a cause, we must attempt to understand why that failure occurred by asking ourselves if the system I just described was in place and working—and that's, of course, our safety management system.

Where we respectfully diverge from the panel's comments about our culture is that, unfortunately, after all of that, we sometimes find that a person has simply chosen a poor course of action that has led to an accident. More frequently than we'd like, further investigation indicates that the employee in question may have had similar issues in the past. Just as society would hold someone accountable for exceeding the speed limit in their motor vehicle, we strongly believe that we must hold people responsible for their choices and actions in the workplace, otherwise improvement is not possible.

On pages 70 and 71 of the report, the panel cites specific positive examples of the culture-enhancing activities of our peers and health and safety committee member involvement in accident investigation—an approach that takes on cardinal rule violations and employee observations with immediate feedback. Perhaps some of the panel's comments stem from poor communication on our part, because at CN, we do all of these things as well.

Finally, and very quickly, on safety management systems, CN fully supports the panel's observation that SMS is the correct approach to continuous safety improvement in our industry. This is why we have taken the safety management system regulations as the basis for our 2008 safety plan and have translated them into actionable steps. It's also why we hosted an SMS workshop for our union-management health and safety committee last December. SMS will always be a work in progress, and we look forward to working with Transport Canada and our union leaders and industry partners to continue the journey.

Thank you, Mr. Chairman. I look forward to your questions.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

Mr. Bell.

[Don Bell, Liberal, North Vancouver, BC]

Thank you, Mr. Chair.

Thank you, Mr. Miller. I'm pleased to see you here.

I have some questions. You mentioned a change in culture and referenced safety by saying that nothing is more important to CN than safety. I wanted to ask a couple of questions on this.

I noticed that you mentioned that you are just approaching your first anniversary on April 25, I think, as CN's first safety officer.

[Paul Miller]

Yes, sir.

[Don Bell, Liberal, North Vancouver, BC]

I noted that your position before that was in operations, I think it was.

[Paul Miller]

That's correct.

[Don Bell, Liberal, North Vancouver, BC]

I guess the concern that came up was that when we started this, almost two years ago this fall, with a motion from this committee—and subsequently the minister appointed the panel that resulted in this report—it appeared that the level of incidents and derailments, particularly in western Canada, but also right across the country, was higher or had spiked up the year previously. There had been a number of serious accidents resulting in death or serious environmental impact, such as at Lake Wabamun and at the Cheakamus River, and the deaths of the locomotive team in British Columbia, and others.

It appeared, and specifically with respect to CN, that safety was not as important as you state it is now. I guess I would note with some interest that your appointment as the first officer was only a year ago, after this inquiry and the panel's report were begun. I'm assuming to some degree that as a result of those two, CN has recognized the importance of the focus, or refocus, if you want to call it that, on safety.

Is that a fair statement?

[Paul Miller]

Yes, sir.

[Don Bell, Liberal, North Vancouver, BC]

I appreciate that, and I'll come back to it in a second.

The issues I have relate to some of the recommendations. I refer you in the panel's report to recommendation 19 on page 210—I'm looking now at the summary of recommendations—and on page 211 to all of recommendation 24.

Recommendation 19 relates to safety management systems and would relate primarily to the company, in this case—it's “companies”, but to CN, since we're talking with you right now—and it talks about the effectiveness of local occupational health and safety committees and the involvement of employees in identifying hazards and assessing and mitigating risks as part of safety management. This, as we heard in some of the testimony, had not been as diligently attended to as might be desired.

Recommendation 24, in a sequence of seven recommendations, again focuses on safety management systems, saying that this is a combination of effort that's required between Transport Canada and the companies that are involved.... I would note the seventh sub-bullet, the bottom one, which is the “means of involving railway employees”, and number 3, the “measurement of safety culture”.

I'm hoping that what I will hear from you, with your statement that nothing is more important to CN than safety, is that the way of doing this is not what appeared from the testimony we had to be one of discipline—a “culture of fear” was the way it was described in the testimony and in the report—wherein employees were intimidated to the point that they were afraid in many cases to pursue their concerns and that the use of these health and safety committees was minimized and bypassed.

I think we have passed a written translation.... I have a photograph, which perhaps, Mr. Chair, could be circulated to my members, and I've given a translation—or one is being done—to the Bloc. It's a photograph of a sign that was in the CN office when I was in Prince George. There was a derailment in the yard in which an engine had T-boned a train and we had a gasoline tanker explode. This was a sign on the wall. I was taking a variety of pictures, and I noted it.

At that time, as you can see on the list of “how we work and why”, safety is fourth out of five topics. The first three are: “service is our product”; “cost control is our ongoing challenge”; “asset utilization is our advantage”; and finally, “safety is every employee's responsibility”.

I would point out there the subtlety. It says, “every employee's responsibility”. It doesn't say “the company's”, or “...is everyone's responsibility”; it lays it on the employee. I wouldn't diminish the fact that safety needs to be the employee's priority as well, but it needs to be the company's corporate priority.

I was disappointed to see that, I guess, but I'm very pleased to see the actions that have been taken by CN with your appointment and with the attention that would appear now to make it a new focus, if you want to call it that, or renewed focus. I'll give you credit for that.

It includes not only, though, involving the employees, because their lives are the ones on the line; it also includes addressing the issues—and you mentioned Hinton—that deal with fatigue, which has to do with the way in which you operate. One of the concerns we had in British Columbia was that it appeared, when CN took over BC Rail, that they brought what is known as, I gather, water-grade railway operating procedure to a mountainous terrain. In other words, I don't think CN fully appreciated the challenges of the curves and the grades that British Columbia represented and that seemed to be reflected in some of the incidents that occurred—and of the length of the trains, which were restricted in numbers at times.

I'm pleased with your comments, your testimony, and I'm hoping that you indeed are able to follow through on the issues of training, of fatigue, and making this a priority in your company.

[Paul Miller]

Do I have a moment to respond?

[The Chair, Conservative, Merv Tweed]

Absolutely.

[Paul Miller]

To your point, sir, about health and safety committees, that's an initiative we have under way already. We're asking all of our health and safety committees to self-evaluate. All the members supply us with an evaluation of how they're doing in terms of their training, their proactiveness, and so on, and we are trying to get back out with the best practices we find, because we feel this is a very valuable tool by which to engage the employees.

As to this sign, all I can say, sir, is that this is not a numbered list; it's not an order-of-priority list. I hope you take me at my word that nothing is more important to us than operating safely.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Miller.

Monsieur Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Thank you very much, Mr. Chairman.

In your presentation, you talked about the culture change and the fact that you didn't necessarily agree with the committee's recommendations. That concerns me a little. On page 79 of the French version of the text, which corresponds to page 71 of the English version, the report states, in the second paragraph:

In the Panel's opinion, over-reliance on discipline does nothing to support healthy management-employee relationships so vital to an effective safety management system. Such relationships must be built on openness and trust and this is difficult or impossible to instill in an environment where employees are constantly fearful of disciplinary action.

That's an allusion to the remarks by Ms. LeBlanc, who, following an accident, stated in a brief that CN had a culture of blame and that it punished rather than educated or remedied the situation.

You've just been hired as chief safety officer, and already you don't agree with the committee's recommendations. I would like you to explain to me why you don't agree with Mr. Lewis, who wrote the report. What don't you like in the report?

[Paul Miller]

Sir, we don't disagree with any of the 56 recommendations the panel has made. We feel there's more work to do, and we're very pleased with the structure that Transport Canada has put in place to involve consultation with unions, with employees, with other railway companies, and with us in terms of bringing these recommendations down to the next level of implementation. Some of them will require change in companies such as ours. Some of them might require legislative change, and so on. And that's a process we're just getting under way with as an industry.

I don't disagree with the paragraph you just read. Where I disagree with respect to the panel—and frankly, it's probably more with some of the resulting comments from the press that came out from the panel's release—is that this is what CN is about. We do not feel we have an overreliance on discipline. It is not our intention to have a culture of fear and discipline in our company.

We firmly believe it is management's responsibility—to one of Mr. Bell's comments—to make sure the system is in place and working properly: people are trained; people are equipped; there are enough people to do the job; the work is properly planned and laid out, properly supervised; and employees have an opportunity to raise safety concerns.

I'm not saying we're perfect, because as we've said all along, and I believe as the panel has said, SMS, and SMS implementation, is a journey that is still under way. We have some way to go. But that's our intention of how to manage this.

We don't disagree with the statement that was made. We disagree with the characterization that this is how CN intends to manage safety—and it's not.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Miller, in the wake of its analysis, the committee made a highly relevant comment, I think, on how CN operates. It's not without reason that this safety culture prevented the safety management system from being entirely effective. I am astounded to hear you say you don't accept the advisory panel's finding, when it concerns precisely the first problem you should have identified.

The culture has to be changed, as was done at Transat and Via Rail. The only way to do that is to ensure that employees and management work hand in hand. As a first condition, it must be ensured that the one doesn't accuse the other; otherwise, the entire safety management system will never work. I wonder why the safety management system hasn't worked in the past seven years, whereas it should have worked. At CN, I got the beginnings of an answer. There is a culture there in which people look for the guilty parties. It's never the fault of the company or managers, but always that of the employees. That's why it doesn't work.

Today, you say you approve of certain recommendations, but not the finding. So if CN doesn't see its problem, it will be in the same situation in seven years. I'm staggered by your remarks. And yet this is an in-depth analysis, based, among other things, on statements made by Ms. LeBlanc after accidents had occurred.

You deny the finding that such a culture exists at CN, which is tantamount to saying that things won't change. You'll try to change the safety management system, but you'll continue using the stick method rather than show some openness toward employees.

I would really like you to present things to me in a different light.

[Paul Miller]

Sir, all I can say is what I said before. It's not our intention to have a big-stick approach, a culture of discipline and fear. We want to work with our employees. For example, when they're doing their audits of rules compliance, we've charged our supervisors with the responsibility to immediately speak with the employees, have a two-way discussion about safety, not just what they've seen at that time but other safety concerns employees have.

We do not discipline employees for bringing forward safety concerns. We know we have to have that communication. Employees see the action from day to day.

[The Chair, Conservative, Merv Tweed]

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Just to continue a little bit on this, not to belabour the point, but it is important with regard to safety management systems being adopted as an ideology of change. Where do you believe you are in terms of reaching the final goal for SMS in terms of operating at the best capacity possible for your company?

[Paul Miller]

I forgot to note the page, but the panel put in a continuum that I thought was very interesting. As I read that continuum, I found elements of what we're doing in levels two, three, four, and five. We're not a five; we're not a four. We have a journey to go through that's been under way for probably longer than any of us would like, but SMS is a big change from how our industry was managed from a safety perspective for many years. We're three in that continuum.

[Brian Masse, NDP, Windsor West, ON]

Have you set a business plan in terms of expectations of reaching level four in x amount of time, and level five, and when it becomes clearly unacceptable, or what you're going to do if you can't reach there? Is there an incentive plan to move toward that? What strategy are you employing to deal with this, other than just trying to...? I imagine you're not just trying to bully your way into the forefront.

[Paul Miller]

Right. Our basic targets are set by performance and results and comparison and trend analyses, so we look at actual results, accidents and incidents by cause, by location, by any number of factors we can look at, and try to take action where we see anything going off track.

For example, today we have a system-based committee working with employees in the southern U.S., because we've seen a significant increase in personal injury accidents in that part of our system.

This is fairly new material to us. To answer your question directly, we haven't gone through that and asked what part of that we have to get to next, but it will be a very worthwhile exercise.

[Brian Masse, NDP, Windsor West, ON]

Okay. To be fair, I'd like at least to hear some more detail with regard to the recommendations. You're very clear in saying you didn't object to any of the recommendations, but you found several that caused you to express—I don't know if “express” is the word you used. You raised concerns over a few of them. Can you lay out which ones may be somewhat troublesome or have some aspects that give concern?

Second, you also mentioned several that did not get in. You might want to take the chance to put them on the record here so that we're aware of them.

[Paul Miller]

Certainly. I appreciate that.

This will take a bit of time to go through, but I'll give you a couple--