Disclaimer : This content is not belongs to officially SABIC rules and regulation or website, may be varried...this content is base on an observation in Ar-razi a methonol product company in Jubail Saudi Arabia..for lesson learned only.
In SABIC (Saudi Basic Industries Corporation), HIPO stands for High Potential Observation or High Potential Incident/Near-Miss. It is a key component of the company's Safety, Health, and Environment Management (SHEM) system, specifically outlined in SHEM-10 (Incident Management Standard), HIPO refers to observed unsafe acts, conditions, or near-misses that have the high potential to cause serious harm, such as fatalities, major injuries, significant environmental damage, or substantial property loss, even if no actual harm occurred.
The purpose is proactive risk identification to prevent major incidents through immediate reporting, investigation, and mitigation. All employees and contractors are required to report HIPOs via SABIC's eSHEM digital platform to foster a culture of safety.
How Many Classes of HIPO?
SABIC classifies HIPOs into 3 classes (Class A, Class B, and Class C) based on the severity of potential consequences. This classification helps prioritize responses, investigations, and corrective actions. The classes are determined by factors like the likelihood of occurrence, exposure level, and potential impact (e.g., injury type, number of people affected, environmental release volume). Higher classes (A and B) trigger more rigorous reviews, while Class C focuses on learning opportunities.
Class A
Catastrophic: Multiple fatalities, permanent total disability, major environmental release (>1,000 kg hazardous material), or property damage >$1 million. High likelihood or multiple barriers failed. | Immediate senior management notification, full root-cause investigation, global sharing of lessons learned.
Class B
Major: Single fatality, permanent partial disability, significant environmental release (100-1,000 kg), or property damage $100K-$1M. Moderate likelihood. | Detailed investigation, site-wide audits, mandatory training for involved teams.
Class C
Serious: Hospitalization, temporary disability, minor environmental release (<100 kg), or property damage <$100K. Lower likelihood but still high potential. Local investigation, corrective actions, and trend analysis for recurring issues.
Consequences of HIPO Violation
A "violation" in the context of HIPO typically means failure to report, address, or mitigate a HIPO observation within SABIC's SHEM guidelines (e.g., not stopping work, ignoring barriers, or delaying reporting). Consequences are enforced under SABIC's EHSS (Environment, Health, Safety, and Security) policy and Code of Ethics to ensure accountability and prevent recurrence. They escalate based on the class and intent (negligence vs. willful). Key consequences include:
- Immediate Work Stoppage: Unsafe work must halt until risks are controlled.
- Disciplinary Actions: Verbal/written warnings, suspension, demotion, or termination for repeat or willful violations. Contractors may face contract suspension or termination.
- Training and Retraining: Mandatory EHSS retraining, competency assessments, or SHEM certification revocation.
- Audits and Fines: Site-wide audits, potential financial penalties for affiliates (e.g., tied to performance KPIs), or regulatory reporting to Saudi authorities like the High Commission for Industrial Security.
- Legal/Regulatory Ramifications: In severe cases (e.g., Class A), escalation to Saudi labor laws, fines up to SAR 100,000 per violation, or criminal charges if gross negligence leads to harm.
SABIC emphasizes "no blame" for genuine reporting but holds individuals accountable for non-compliance to align with ISO 45001 standards.
Using a angular grinder without a wheal guard
Using an angle grinder without a wheel guard in SABIC is classified as a Class A High Potential Observation (HIPO) in almost all cases.
Why it is Class A in SABIC
SABIC strictly follows the SHEM-8.7 tools handling...
“You must use the correct tool for the job and ensure all safety devices (guards, dead-man switches, etc.) are in place and functional.”
Removing or operating an angle grinder without the wheel guard is considered a direct, willful violation of a Life Saving Rule with very high potential for a fatality or permanent disability (wheel/disc explosion or fragmentation can cause fatal head/chest injuries or amputations).
In SABIC’s internal HIPO classification table (2023–2025 version), the following exact or very similar example is listed:
Operating an angle grinder without wheel guard (or with guard removed) Class A High-energy projectile risk, multiple recorded industry fatalities, direct SHEM violation
- The employee who operates it: Immediate suspension + final written warning or termination (especially if repeated or deliberate).
- The direct supervisor: Suspension without pay (3–14 days) + demotion or termination if he/she allowed or failed to stop it.
- Contractor company: Minimum 6-month blacklist from SABIC sites or permanent debarment for repeat offenses.
- The incident is reported globally inside SABIC as a “Class A HIPO + Life Saving Rule violation” with photos and lessons learned.
Concrete surface preparation without wheal guard of grinder
What you MUST do instead (the only approved ways in SABIC)
- Stop the job immediately if the guard is removed.
- Get one of the approved tools above (they are always available from site tool crib or contractors’ store).
- If your company does not have them → raise a purchase requisition today and tell your supervisor it is a Class A risk.
What will NOT save you if caught
Summary
Using a grinder without the wheel guard = Class A HIPO in SABIC (100 % of cases).
It is treated as one of the most serious violations because the potential consequence is almost always fatality or life-changing injury.
If you see this happening, you are required to stop the job immediately, report it through eSHEM as a HIPO, and the person will face severe disciplinary action. There is no leniency on this rule anywhere in SABIC globally.
Reviewed by Munir Ahmad
on
December 02, 2025
Rating:
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