“Justifying Cost in this economic climate is an important issue. It is well recognised that financial stress leads companies to ignore major risk. In the banking sector, since the GFC, there is now a stress testing process to ensure that banks don’t end up ignoring their responsibilities to manage major financial risk carefully. In the petroleum sector it is also recognised that major accidents are more likely when companies are experiencing financial stress.
In my own work, for every accident I studied I asked myself whether cost-cutting was a contributory factor.
In most cases it was possible to demonstrate that cost-cutting had been taking place prior to the accident, that it had resulted in cutbacks in training, supervision and maintenance, among other things, and that weaknesses in these areas had in turn contributed to the accident. On this basis one could say that cost-cutting was a contributory factor to these accidents.”
Professor Andrew Hopkins