In mid-September this year, Auckland went through a serious event that involved a major fuel line at Auckland International Airport being damaged. The result of this was city and nationwide frustration on a steady ripple effect of issues caused by the lack of fuel.
Whilst most businesses could operate as normal, there have certainly been some interesting developments and issues surrounding what we did about it.
RiskLogic spent some time recently pulling the facts and figures on this crisis.
Overview of stats:
- Suspected digger driver/contractor tears main fuel line in Northland.
- Airlines reduced to 30% of fuel.
- Thousands miss key flights and connections internationally.
- Government warned of potential risks back in 2010.
- Supply chain issues and preparation to blame.
A Summary: What happened in Auckland?
The leak, caused by a one-man digger 8km south of Marsden Point oil refinery in Northland, was discovered last Thursday. At the time, it was expected to affect about 2000 travellers a day as jet fuel is rationed.
The 130km pipeline resulted in airlines being restricted to only 30% of fuel allowance per trip. This meant most international flights were cancelled over that weekend.
Fuel Industry spokesman, Andrew McNaughton said on the 19th of September that “we are certainly taking up the Governments offer of the Navy vessel that can distribute diesel…as well as their technical expertise”, suggesting that the Fuel Industry didn’t have this in place, to begin with.
Four of the Z Fuel stations in Auckland were out of their 95 Premium gas after 24 hours due to the delays.
More than 30 flights, including 12 international trips, were cancelled on the Tuesday morning. By the Wednesday, thousands of passengers were planning for rescheduled flights with hundreds of complaints and communication issues streaming into Auckland Airport operations.
“As with any spill, the regional council is investigating the circumstances leading up to it and will consider what, if any, further action is appropriate in due course”.
A spokesperson for Northland Regional Council said most swamp kauri extraction on farmland (area of the incident) in Northland did not require resource consent from the regional council, and none had been issued for the area where the pipe was damaged.
“However, the council stresses any such action is currently secondary to its primary focus; ensuring the appropriate recovery of the spilt fuel and clean-up of the site.”
It was reported that 80,000 litres of fuel were spilt at the Ruakaka (roughly two tankers worth) but the council confirmed no waterways were affected.
How were businesses affected?
The most affected organisations seemed to be Auckland’s daily airline providers and the Government. In 2012, National were warned of the vulnerability of this fuel line, however, Bill English (New Zealand Prime Minister) said the arrangements of this fuel line was between the fuel companies and airlines.
Labour leader Jacinda Ardern used this as an opportunity to comment on the Governments lack of infrastructure and plans to New Zealand businesses.
When discussing the impacts and looking for an update from our Auckland based client Rakon, Andre Greissner Engineering Manager, Equipment’s & Facilities mentioned that although their organisation was not affected, it was a big wake up call to the massive impacts it could have had.
“We’ve had exactly the same issue five years ago. Two weeks [of] total gas outage in the city because the only pipeline got damage in a mudslide. And that was known to be a serious threat too, for years”.
Locals in Ruakaka mentioned to NewsHub reporters that they had seen multiple diggers in this location as far back as 2011. Trees, swamps and new lines have been removed in this location over the years.
It was reported that only 12 local Auckland businesses were temporally closed during the crisis. All of these businesses were in some way related to the aviation industry and none were closed more than 48 hours after the event.
What key lessons can we learn?
Interestingly, around the time of this event occurring, RiskLogic was meeting with our partners Aon to understand the concerns around contractors on site for our clients:
- Are these contractors briefed?
- Do they know the precautions your staff usually take?
- Yes, they understand basic health & safety, but are they aware of possible major impacts to your business?
During our training session with the Greater Wellington Regional Council this month, we identified that on many occasions for New Zealand organisations, contractors are frequently on site. More and more organisations are outsourcing, that’s not unusual and can be a very efficient way of delivering a key business function.
As an organisation, you should consider a few things about your supply change or contractor:
- How effective and prepared is my supply chain?
- How briefed are our contractors?
- Could we afford complete downtime/offline mode for more than 24 hours as a result of something our contractors did?
The argument between the fuel lines contractors and the public is that a local farmer caused this event. The public, especially locals refuse to believe this as most media outlets are blaming the contractor. Its not uncommon to see finger pointing and passing the buck. However, as I’ve stated before if you were effected by this event and it resulted in an interruption to your services (whatever that might be), to your key stakeholders, the responsibility still lies with you. You have to have a contingency to deal with this.
The key lesson here is that your resilience plan should cross all areas of operation, including contractors and supply chain.
What can you do today to ensure you’re better prepared if something like this happens again?
- If you’ve got a Business Impact Analysis (BIA) time to dust it off and check your critical functions and what are the external dependencies. What does the delivery of those functions rely on from an external party:
- Name of the third party, do they still exist?
- Who is the primary contact?
- Have they got up-to-date site clearance?
- What is their level of resilience. Have they got a plan, have the validated it?
- If you haven’t got a BIA – get one.Think of some scenarios that may affect your external party and ask them how they would respond:
- Another fuel crisis
- A city-wide weather event, closing roads
- Major power loss
- Cyber event
- Create a desktop exercise to test your internal procedures, invite your contractors or supply chain to attend.
How we can all avoid it happening again?
Your Business Impact Analysis (BIAs) should be able to identify the potential risks and threats that may eventuate for your organisation. If fuel crisis isn’t on there, then it might be worth adding it. Both the Fuel and Aviation industry should have identified this event to be a potential risk back in 2011, but as no one wants to take the blame now, neither have proved they did.
Make sure you are not caught out by someone else’s shortcomings. You can get on top of this by taking a look at your current BIA today!
As I write this article we have seen yet another example of 3rd party and supply chain disruption causing a major outage, check out my defence force article here: http://risklogic.co.nz/how-the-defense-force-was-hacked/
Until next time, Plan, Do, Check and Act…