FAQs – Focused Audits
- Can you explain a bit more about the new focused audit approach?
- What are Information Advisories (IA) and why did the NEB issue one?
- You mention something called “Management Systems”. What are they and why have one?
- Why did the NEB change its approach to how it completed company audits?
- Will the NEB only use new audit process now? Or will full company audits still be completed?
- What topics did NEB to audit for these first reports?
- How did the NEB choose those specific areas/elements to audit?
- Which companies were audited?
- Why did the NEB only audit eight companies and how did they select those companies?
- Doesn’t looking at fewer audit elements actually mean the NEB is scaling back audit oversight?
Can you explain a bit more about the new focused audit approach?
The new audit approach takes a more focused view and will look at specific areas identified through analysis of the NEB’s compliance data.
Rather than looking at one company’s entire management system and six programs (which is a large undertaking), the new protocol looks at a management system requirement and applies that element across multiple companies – enabling us to do a more “apples to apples” comparison. Through this new approach we are able to more easily trend data, compare company results, and identify systemic gaps.
These audit reports are also shorter making them more accessible to Canadians.
What are Information Advisories (IA) and why did the NEB issue one?
Information Advisories, or IAs, serve as an important tool to advise NEB-regulated companies when there is a change to processes, requirements, areas for attention etc. They can also include directives the NEB expects regulated companies to follow. Through this IA in we expect all NEB-regulated companies to consider and review the findings found in the recently released audit reports and use them to improve their management systems.
Using a newly developed focused audit process, the NEB completed nine reports looking at eight companies. Common findings identified across those eight have highlighted there could be larger potential issues across industry. As a result, through this IA, the NEB is asking all regulated companies (not just those audited) to:
- Review the all information in the audit reports and consider all learnings;
- Compare the information in the audit reports against their management system; and
- Use those findings to ensure their infrastructure meets the NEB’s regulatory requirements and consider any improvements.
You mention something called “Management Systems”. What are they and why have one?
Management Systems are the collection of processes and procedures that a company uses to manage its operation in order to achieve the outcome of protecting people and the environment. Simply put, it is a “blue print” to manage operations, manage risks and promote continual improvement. Organizations with well-functioning management systems are better at anticipating, preventing, managing and mitigating issues that can affect safety, security and environmental protection. We expect that all our regulated companies have an effective, fully developed and implemented management system.
A necessary component of any management system is the use of performance measures. These measures are used to gather consistent and comparable information for continual improvement. For example, the NEB requires all regulated companies to report on incidents, such as releases of substances or serious injuries. In collecting this data, we are able to have a historical view of company’s performance, which then helps us determine if future compliance verification activities, like audits, are warranted for a particular company.
Why did the NEB change its approach to how it completed company audits?
The Board wanted to examine topics related to safety across several companies. We found that by auditing one topic or issue across more than one we could identify systemic issues and drive to management system improvements across industry.
Will the NEB only use new audit process now? Or will full company audits still be completed?
This new audit process will not replace full scale company audits, but rather supplement as an additional tool in the NEB’s compliance toolkit.
What topics did NEB to audit for these first reports?
The two topics the NEB selected to audit in 2016/17 are related to two sub-elements from the 2009 Management System and Protection Program (4.1 Inspection Measurement & Monitoring and 4.2 Investigating, and Reporting Incidents and Near Misses). These audits were designed to target field level activities as well as verifying the links between these field activities and the management system processes.
How did the NEB choose those specific areas/elements to audit?
The NEB used a risk-informed approach in determining which activities and processes to audit. This means we looked at our existing data sets (inspection data, previous audits, company performance and plans, incidents and other industry data) and used it to determine which areas to focus on. In this case, we chose to examine Management System Sub-elements 4.1 and 4.2 because of the role these activities and processes play in keeping pipelines safe.
Which companies were audited?
Eight companies were audited to complete the nine audits.
For Investigation and Reporting Incidents and Near-misses the NEB audited the following four companies:
- Pembina Energy Services Inc. and Pouce Coupé Pipe Line Ltd.
- Plains Midstream Canada (ULC)
- Maritimes & Northeast Pipeline Management Ltd.
- Express Pipeline Ltd.
For Inspection and Monitoring the NEB audited the following five companies:
- Plains Midstream Canada ULC and Aurora Pipe Line Company Ltd.
- Trans Mountain Pipeline ULC
- Westcoast carrying on business as Spectra Energy Transmission
- Trans-Northern Pipelines Ltd
- Kinder Morgan Cochin ULC
Why did the NEB only audit eight companies and how did they select those companies?
When determining which companies to look at, again, we applied our risk-informed approach to evaluate regulated companies and their facilities. This evaluation looks at a number of criteria including:
- identification of potential consequences to people and the environment posed by facilities or an installation, based on its location, type, age, operating history, etc.
- a review of historical information on the company’s or operator’s management of these consequences collected through previous compliance monitoring activities.
Doesn’t looking at fewer audit elements actually mean the NEB is scaling back audit oversight?
Not at all. In fact, the NEB will be able to do more audits. By assessing specific issues across multiple companies the NEB will be able to take actions (if necessary) and share learnings more broadly across regulated companies. For example, if the NEB looks at one issue across five regulated companies and all five are non-compliant, this may mean there is a larger industry-wide issue. The NEB can in turn issue an IA to all regulated companies, potentially requiring them to take mitigation.
Also audits are one tool in our oversight toolkit. Other compliance verification activities include inspections, information meetings, information requests, etc.
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