ARCHIVED - Maritimes and Northeast Pipeline Management Ltd. - Audit Report OF-Surv-OpAud-M124 01 - Appendix III: M&NP Environmental Protection Program Audit Evaluation Table

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Appendix III
M&NP Environmental Protection Program Audit Evaluation Table

1.0 POLICY AND COMMITMENT

1.1 Policy and Commitment Statements

Expectations: The company shall have a policy approved and endorsed by senior management (the Policy). It should include goals and objectives and commit to improving the performance of the company.

References:[1]
OPR-99 sections 4 and 48
CSA Z662-07 Clause 10.2.2

Assessment:
As part of an Operations and Maintenance (O&M) Agreement between M&NP and its Operator, the Operator is implementing and maintaining the Environment, Health and Safety (EHS) Management System (MS). As part of the EHS MS, the Operator's Environmental Protection Program (EPP) policy and charter documents provide adequate direction and outline commitment to environmental protection.

The Board noted that this policy was available at all workplaces and on the corporate intranet site. Signed off by Management, the policy was communicated to employees and integrated into operational documents. Interviews confirmed that the policy was understood by employees.

Compliance Status: Compliant

[1] Each “Reference” in this table contains specific examples of the “legal requirements” applicable to each element but are not necessarily a complete list of all applicable legal requirements.

2.0 PLANNING

2.1 Hazards Identification, Risk Assessment and Control[2]

Expectations: The company shall be able to demonstrate a procedure to identify all possible hazards. The company should assess the degree of risk associated with these hazards. The company should be able to support the rationale for including or excluding possible risks in regard to its environment, safety, integrity, crossings and awareness and emergency management and protection programs (management and protection programs). The company should be able to implement control measures to minimize or eliminate the risk.

References:
OPR-99 sections 4(2) and 48
CSA Z662-07 Clause 10.2

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS

Document review and staff interviews established that the Operator is aware of the majority of the environmental hazards and aspects which could be associated with these facilities. Mitigation measures associated with those risks were also documented in procedures and understood by staff. As well, the Operator indicated that its measurement and monitoring activities (inspections and aerial patrols) provide an additional method of identifying environmental hazards and aspects. The final two practices are formalized within the Operator’s Safety Evaluation Process and are applied to all EHS processes.

Presently, the Operator relies on the risk mitigation that was developed for the project application and construction activities as opposed to a formal hazard identification process for the associated risks that could be present in the operations phase. For ongoing hazard identification, the Operator identified that it relies on its staff to detect environmental hazards and aspects during pre-job and contract development processes.

In order for a hazard identification process to be compliant, the continual monitoring of environmental hazards must include a formal process to ensure adequate identification and mitigation for the operation stage. During the audit, the Operator provided evidence that it was updating its EHS procedures. This update included a formalized Operations Controls Table which systematically reviewed the regulated activities and identified potential controls for each issue or hazard. This table, while not being complete or implemented at the time of the audit, was viewed as appropriate to meeting the majority of the Board’s requirements for this element.

The lack of a formal and ongoing process for identifying hazards hampers the implementation of standardized effective mitigation measures system wide.

Given the age of the facilities, the present processes for identification of environment hazards are adequate and use of information developed during the application and construction processes is a prudent practice. However, the incorporation of the application information should be formally validated in a procedure to promote ongoing effectiveness.

Although the list of hazards used is still applicable to the M&NP facilities, by continuing the present hazard identification method and given the regulatory requirement for a formal process, the Operator risks not being in compliance in the future. The Board recommends that the Operator introduce a process to identify and manage its ongoing environmental hazards and aspects for its operations and maintenance activities.

Compliance Status: Compliant with Recommendation

[2] Hazard: Source or situation with a potential for harm in terms of injury of ill health, damage to property, damage to workplace environment, or a combination of these. Risk: Combination of the likelihood and consequence(s) of a specified hazardous event occurring

2.2 Legal Requirements

Expectations: The company shall have a verifiable process for the identification and integration of legal requirements into its management and protection programs. The company should have a documented procedure to identify and resolve non-compliances as they relate to legal requirements which includes updating the management and protection programs as required.

References:
OPR-99 sections 4, 6 and 48
CSA Z662-07 Clause 10.2.2(g)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator was unable to demonstrate that a process was in place to ensure the on-going monitoring of legal requirements on behalf of the certificate holder. The Operator indicated that its internal audit program develops a legal list which incorporates all legal requirements on an on-going basis. The Board’s auditors were provided with documentation indicating that the Operator’s internal audit group in Houston develops lists of legal requirements to populate the internal audit protocols. To develop these lists, they conduct interviews with auditee groups and staff who participate in professional and industry associations and monitor legal update services. The Board’s auditors reviewed the lists and protocols that the Operator provided for the evaluation of legal requirements on other NEB-regulated facilities. Examination of these documents indicated that they were not exhaustive of all required legislation and some applicable regulatory requirements were not included.

The Board’s audit did not include a formal evaluation of compliance against each of the missing legislation; however, the Operator could not demonstrate that it has a formal process to reliably identify and incorporate all the legal requirements into its Environmental Protection Program (EPP) as required in this element.

Compliance Status: Non-compliant

2.3 Goals, Objectives and Targets

Expectations: The company should have goals, objectives and quantifiable targets relevant to the risks and hazards associated with the company’s facilities and activities (i.e., construction, operations and maintenance). The objectives and targets should be measurable and consistent with the Policy and legal requirements and ideally include continual improvement and prevention initiatives, where appropriate.

References:
OPR-99 section 48
CSA Z662-07 Clause 10.2.2(h)(ii)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator’s EHS policy contains broad goals and objectives for its EHS MS. Company environmental objectives are discussed at the beginning of the year, at least once during the year and again at the end of the year when the past year’s performance is evaluated and objectives are established for the next year. The Operations and EHS Committees, which consist of Vice Presidents of the various divisions, establish the goals and targets. The committees provide reports/updates to the Operator’s senior management. Action plans and objectives related to the environment program are set out by the Operations Committee, EHS Committee and management, and are also incorporated into individual staff’s personal safety action plans.

As part of the implementation of its EHS programs, EHS goals, targets and objectives have been identified for all staff and are included in individual job descriptions. Employees are measured and are provided recognition in meeting their EHS performance objectives as part of the “Short Term Incentive Programs”.

The audit identified that goals, objectives and targets, while managed appropriately, only meet the minimum requirements to be compliant and could be improved by addressing issues more relevant to NEB regulated operations. Particularly, it was noted that the goals focussed on broader regional issues such as compression which is more relevant to the Northeastern (NE) United States (U.S.) facilities where the majority of this region’s activities are located. Presently there are no compression facilities in Canada; therefore, the goals do not fully reflect the NEB regulated facilities.

The Board recommends that these goals and targets be reviewed to verify their suitability to the Canadian operational requirements. In order to ensure ongoing compliance, the Board recommends that the Operator expand its goals, objectives and targets to better reflect regional differences.

Compliance Status: Compliant with recommendation

3.0 IMPLEMENTATION

3.1 Organizational Structure, Roles and Responsibilities

Expectations: The company shall have an organizational structure that allows its management and protection programs to effectively function. The company should have clear roles and responsibilities, which may include responsibilities for the development, implementation and management of the management and protection programs

References:
OPR-99 section 48
CSA Z662-07 Clauses 10.2.1 and 10.2.2(b)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator has established an EHS Management Team with specific accountability for the EHS program. Overall accountability for EHS issues is maintained by the EHS Committee (EHSC) which is comprised of senior personnel. The EHSC provides regular updates to the Board of Directors. The Operator was able to demonstrate through documentation that this committee is functioning as planned. Quarterly records of reviews conducted by this committee were examined. The lines of reporting for EHS issues are outlined, and include reporting routes from the Vice President, Operations NE Transmission; Manager, NE-Health & Safety; and EHS Support Specialist. The other line of reporting includes the Director EHS, Houston.

Board auditors reviewed job descriptions to confirm that specific EHS responsibilities and accountabilities had been identified and included. The EHS Support Specialist with assistance of the regional Lands, Emergency Planning and Public Awareness Coordinators (Coordinators) and the Operations Technicians are accountable for the implementation of environmental procedures and practices. Interviews with regional technical staff indicated that environmental roles and responsibilities were not fully and formally contained within the various job descriptions. At the time of the audit, the Operator was unable to provide a formal, up-to-date job description for the EHS Support Specialist that articulated the full scope of this position’s responsibilities and authorities. However, interviews confirmed that, in practice, the responsibilities were well understood.

As well, interviews with regional staff established that the structure in practice was appropriate; however, it should be formalized and the various needs including training, reporting structure, etc. be more formally managed.

Board auditors noted that the expectations of the EHS Support Specialist appeared to be significant for one person to manage. For instance, the EHS management workload involved review and development of new practices and procedures as well as contract management and on-sight oversight activities. The unofficial duties undertaken by the Coordinators may be an indicator of the enormity of the responsibilities of the position. It is suggested that, while the effort and results demonstrated by the staff member were significant, the Board’s findings with respect to the lack of formalization and proceduralization could have been mitigated with increased resourcing of this position.

Although the Operator was addressing the environment-related tasks, it could not demonstrate that it had defined environmental responsibilities for the EHS Support Specialist and regional technical staff as required. Furthermore, it is recommended that the Operator review the level of resourcing for EHS program oversight to ensure that environmental protection is suitable and maintained.

Compliance Status: Non-compliant

3.2 Management of Change

Expectations: The company shall have a management of change program. The program should include:

  • identification of changes that could affect the management and protection programs;
  • documentation of the changes; and
  • analysis of implications and effects of the changes, including introduction of new risks or hazards or legal requirements.

References:
OPR-99 section 6
CSA Z662-07 Clause 10.2.2 (g)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator is in the process of implementing a Management of Change (MOC) process which outlines the identification, assessment and implementation of changes once they have been approved by the appropriate responsible individuals according to the EHS MS MOC Performance Standard 2.7. As well, it was noted that there is a collaborative process to review all standard operating procedures against all applicable regulatory requirements and best practices. The EHS group is leading this process with support of senior management and regional subject matter experts.

However, at the time of the audit, the Operator did not demonstrate a fully implemented MOC procedure. The current process did not include proactive formal identification of required changes and a formal analysis of the effects that the changes may require.

Although an MOC process exists as a Performance Standard, it was determined that the MOC process is only partially implemented as described in the standard by various corporate technical areas including Environment. As the regulations require the MOC to be implemented as designed, this element has been evaluated as Non-Compliant.

Compliance Status: Non-compliant

3.3 Training, Competence and Evaluation

Expectations: The company shall have a documented training program for employees and contractors related to the company’s management and protection programs. The company shall inform visitors to company maintenance sites of the practices and procedures to be followed. Training requirements should include information about program-specific policies. Training should include emergency preparedness and environmental response requirements as well as the potential consequences of not following the requirements. The company should determine the required levels of competency for employees and contractors. Training shall evaluate competency to ensure desired knowledge requirements have been met. Training programs should include record management procedures. The training program should include methods to ensure staff remains current in their required training. The program should include requirements and standards for addressing any identified non-compliances to the training requirements.

References:
OPR-99 sections 28, 29, 30(b), 46, 48 and 56
CSA Z662-07 Clause 10.2.2(c)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator maintains records of all training required and completed by all workers in the regional offices. A review of the training matrix for employees assigned to operating and maintaining the M&NP pipeline includes environmental content. This matrix lists all core training courses and the frequency with which they are required. The Operator provides employees with any updates to this matrix when additional training requirements are identified or should existing curricula be changed. Document review confirmed that the Human Resources Orientation Checklist includes all relevant EHS courses and managers are required to sign-off.

Although the training matrix was applicable to many of the operations staff, review of the environmental training program and training requirements indicated that it was focused on frontline staff (Operations Technicians). Further examination concluded that the training matrix did not include refreshment requirements for technically advanced staff with roles and responsibilities in the EHS program such as the Coordinators who are required to exhibit technical knowledge. In order to achieve compliance, senior level technical staff should be considered for training to promote the continual improvement of the program.

It was noted that there were no training or competency requirements for the professional staff (EHS Support Specialist). This omission was considered significant as the majority of the environmentally related activities are coordinated or undertaken in this position.

Compliance Status: Non-compliant

3.4 Communication

Expectations: The company should have an adequate, effective and documented communication process(es):

  • to inform all persons associated with the company’s facilities and activities (interested persons) of its management and protection programs policies, goals, objectives and commitments;
  • to inform and consult with interested persons about issues associated with its operations;
  • to address communication from external stakeholders;
  • for communicating the legal and other related requirements pertaining to the management and protection programs to interested persons; and
  • to communicate the program’s roles and responsibilities to interested persons.

References:
OPR-99 sections 18, 28, 29 and 48
CSA Z662-07 Clause 10.2.2(d)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator was able to demonstrate that it employs many methods for communicating environmental requirements with its internal and external stakeholders. Review of meeting notes indicated that environmental issues and requirements were communicated through: safety stand down meetings; quarterly employee meetings and safety updates; daily tailgate meetings; daily and weekly safety reports; NE Region Health and Safety Newsletters; monthly safety & communication meetings; monthly reports to EHS Corporate group; contract management activities; pre-job meetings; intranet sites; etc.

However, the Operator could not demonstrate that it had developed and formalized a communication plan within the organization that clearly identifies a method to ensure that all affected parties receive pertinent EHS information through formally adopted communication channels. Although interviews confirmed communication is occurring throughout technical networks and through the means identified above, without a formal communication plan, the Operator cannot ensure that all interested parties are receiving the necessary information in a timely fashion. The informal nature of the communication makes it difficult to demonstrate the ongoing adequacy of the communication efforts currently taking place within the organization.

The Board could not verify that a formalized communication plan exists within the organization that clearly identifies interested parties and pertinent environmental information that is required to be communicated in accordance with Board expectations.

Compliance Status: Non-compliant

3.5 Documentation and Document Control

Expectations: The company should have documentation to describe the elements of its management and protection programs-where warranted. The documentation should be reviewed and revised at regular and planned intervals. Documents should be revised immediately where changes are required as a result of legal requirements or where failure to make immediate changes may result in negative consequences. The company should have procedures within its management and protection programs to control documentation and data as it relates to the risks identified in element 2.0.

References:
OPR-99 sections 27, 48 and 56
CSA Z662-07 Clause 10.2.2(e) and (f)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

Documents related to the Environment Program are managed at the regional offices. During the audit, the Operator demonstrated that it has developed documentation which describes its management system initiatives. Document review confirmed that a comprehensive document management system is in place, which includes control and transmittal tracking of all documents. As well, there was evidence that the documents are undergoing periodic reviews and adjustments.

Board auditors noted that, the Operator is continuing to use the EPP developed to address hazards and aspects identified in the application phase for direction when undertaking environmental activities even though the pipeline has been in the operational phase for a decade. While the application-stage procedures may be adequate for protection of the environment during the operational phase, these procedures have not been formally reviewed and deemed appropriate for operations. In order to ensure present and ongoing suitability and compliance of these EPP documents, the Operator should review and update these documents to reflect the risks, hazards and aspects of the operational phase where required.

A fully compliant and implemented document control process should have indentified the need to formally develop and manage these documents to ensure that they continue to be fit-for-purpose and incorporate all legal requirements beyond the application and construction phases.

Therefore, the Operator could not demonstrate that the EPP in place adequately addresses all the appropriate environmental aspects associated with the operation and maintenance of the pipeline system.

In its comments on the Draft Audit Report, M&NP noted that its EPP, filed as part of its original facility application, indicated that it would be used during the operation of its facilities. M&NP committed to submit future revisions to the EPP to the Board for approval. The Board notes that, without a fully-developed review and revision process for environmental programs, a company cannot demonstrate that it is anticipating, preventing, mitigating and managing conditions which have a potential to adversely affect the environment as required by section 48 of the Onshore Pipeline Regulations, 1999 (OPR-99). While the Board recognizes M&NP’s commitment, it does not expect submission and approval of EPPs on a routine basis. Further, M&NP should have developed an EPP for its operations which has been reviewed and, if necessary, revised.

Compliance Status: Non-Compliant

3.6 Operational Control - Normal Operations

Expectations: The company should establish and maintain a process to develop, implement and communicate mitigative, preventive and protective measures to address the risks and hazards identified in elements 2.0 and 3.0. The process should include measures to reduce or eliminate risks and hazards at their source, where appropriate.

References:
OPR-99 sections 27-49
CSA Z662-07 Clauses 10.2.2(f) and 10.3.1

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

Except where noted, the Operator, had developed and implemented controls for managing the legal requirements and environmental aspects and risks it had identified. Further, the Operator provided working documentation for the re-development of EHS management processes and procedures which included a formal EHS Operational Controls table. This table serves to document and manage issues which require control to minimize their effects.

As noted in Elements 2.1 and 2.2 above, the Operator has not demonstrated that it has fully compliant processes for identifying all of its legal requirements and environmental aspects and risks for its NEB regulated facilities. Therefore it could not demonstrate that it had identified all controls required to be developed to assure protection of the environment. As well, as noted in Document Control (Element 3.5) above, the Operator was utilizing outdated and unapproved or unreviewed procedures which may or may not be meeting the environmental protection requirements.

As the Operator was unable to provide an adequate hazard identification process and document control procedures, it could not demonstrate that its procedures were adequately addressing all hazards. The Operator was unable to demonstrate whether it was anticipating and controlling its environmental risks appropriately.

Compliance Status: Non-compliant

3.7 Operational Control - Upset or Abnormal Operating Conditions

Expectations: The company shall establish and maintain plans and procedures to identify the potential for upset or abnormal operating conditions, accidental releases, incidents and emergency situations. The company shall also define proposed responses to these events, and prevent and mitigate the likely consequences and/or impacts of these events. The procedures must be periodically tested and reviewed, and revised where appropriate (for example, after emergency events).

References:
OPR-99 sections 32, 35 and 52
CSA-Z662-07 Clauses 10.3.2 and 10.3.5

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

Due to the type of the product (sweet, dry gas) and the minimal above-ground facilities, environmental impacts related to upsets would be limited to:

  • the effects of the failure of slopes at either upland or watercourse crossings;
  • the effects of loss of integrity at water course crossings;
  • the release of small volumes of operationally-related wastes;
  • WHMIS managed products; and
  • an unintended release of product into the atmosphere.

Control of these issues would consist of application of normal operating procedures and practices. Upset conditions would trigger the Emergency Response Plan. Therefore no specific evaluation of this issue is made within the EPP with the finding being consistent with Element 3.6.

Compliance Status: N/A

4.0 CHECKING AND CORRECTIVE ACTION

4.1 Inspection, Measurement and Monitoring

Expectations: The company shall develop and implement surveillance and monitoring programs. These programs should address contract work being performed on behalf of the company. These programs should include qualitative and quantitative measures for evaluating the management and protection programs and should, at a minimum, address legal requirements as well as the risks identified as significant in elements 2.0 and 3.0. The company should integrate the surveillance and monitoring results with other data in risk assessments and performance measures, including proactive trend analyses. The company shall have documentation and records of its surveillance and monitoring programs.

References:
OPR-99 sections 39, 48, 53(1) and 54(1)
CSA Z662-07 Clauses 9.1.7, 10.2.2, 10.7.2.5, 10.7.2.6, 10.7.2.8 and 10.14.1

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator performs many activities to measure and monitor the implementation of the EHS MS. Environmental issues are discussed where required in the development and review of: daily and monthly progress reports; daily and weekly safety inspection reports; daily tool box meetings; weekly all staff meetings; weekly behavior based inspections; incident reporting and review; incident investigations; monthly right-of-way aerial patrols; annual full length right-of-way inspections; and within the Incident Without Loss system. The Operator was able to demonstrate development and implementation of the activities through the review of documentation and records provided, and during interviews with staff.

In addition, interviews and record review confirm that, as part of its post-construction activities, the Operator undertakes an additional review and evaluation of the environmental mitigation program applied during the construction of its facilities.

M&NP provided additional information through its comments on the Draft Audit Report indicating that any identified environmental issues are documented in the “Environmental Issues Report” or Aerial Patrol report form. M&NP also indicated that the requirement for a full right-of-way inspection is noted in the Operations and Maintenance Specification Manual Section 02 Reference 05.

Although M&NP commented that environmental issues are documented, the Board recommends that M&NP should also maintain a record for those inspections when no environmental issues were encountered. Without some sort of documentation, it is hard for M&NP to demonstrate and for Board auditors to verify that these inspections are taking place.

The Board recommends that M&NP maintain a record of its environmental inspection activities whether or not environmental issues are identified.

Compliance Status: Compliant with recommendation

4.2 Corrective and Preventive Actions

Expectations: The company shall have a process to investigate incidents or any non-compliances that may occur. The company shall have a process to mitigate any potential or actual issues arising from such incidents or non-compliances. Such mitigation may include appropriate timing and actions for addressing the issues that arise.

The company shall demonstrate that it has established a documented procedure to:

  • set criteria for non-compliance;
  • identify the occurrence of any non-compliances;
  • investigate the cause(s) of any non-compliances;
  • develop corrective and/or preventative actions; and
  • effectively implement the required corrective and/or preventative actions.

The company should develop procedures to analyze incident data in order to identify deficiencies and opportunities for improvement in its management and protection programs and procedures.

References:
OPR-99 sections 6 and 52
CSA Z662 Clauses 10.2.2(g) and (h)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

Through document review and interviews, the Operator was able to demonstrate that it has adequate processes in place to identify, develop and implement corrective and preventive actions which arise from its management or incident investigation processes. The Operator was able to demonstrate through document and record review that it has developed and implemented appropriate incident management and investigation processes.

Compliance Status: Compliant

4.3 Records Management

Expectations: The company shall establish and implement procedures to ensure that the records supporting the management and protection programs are retained, accessible and maintained. The company shall, as a minimum, retain all records for the minimum lengths of time as required by the applicable legislation, regulation and standards incorporated by reference into the regulation.

References:
OPR-99 sections 48 and 56
CSA Z662-07 Clause 10.2.2(e)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

Records relating to the EPP were retained in the regional offices. Document review confirmed that the Operator had record retention processes in place which include appropriate types of records to be retained, retention timeframes and disposal methods. All records requested were readily retrieved.

Compliance Status: Compliant

4.4 Internal Audit

Expectations: The company shall develop and implement a documented process to undertake audits of its management and protection programs and procedures. The audit process should identify and manage the training and competency requirements for staff carrying out the audits. These audits shall be conducted on a regular basis.

References:
OPR-99 sections 53 and 55
CSA Z662-07 Clause 10.2.2(c) and (h)(iii)

Assessment:
As part of an O&M Agreement between M&NP and its Operator, the Operator is implementing and maintaining the EHS MS.

The Operator has developed and implemented an internal audit program which evaluates its EPP against identified regulatory requirements and management system principles. The program includes a process for following-up and closing-out issues identified in the audits which are reported to senior management. Responsible managers and staff accountable are held responsible for ensuring action items are completed in a timely manner.

The review of the internal audit program indicated that, although the audit process was well documented and being appropriately managed, the program was not meeting the requirements of OPR-99 as it did not include an assessment of the adequacy of the EPP in meeting the requirements of section 48 of OPR-99. The Board determined that the audit process relied on a self identification of requirements by the operating staff and management. This method does not incorporate an all inclusive review of the activities and regulatory requirements and could result in missing requirements that would then be unidentified and unmeasured.

The Operator could not demonstrate that all legal requirements for the EPP were appropriately defined and that the internal audits were inclusive of all applicable regulatory requirements. As the audit process was lacking formal and comprehensive identification and evaluation of M&NP’s regulatory requirements, the framework on which the audits were based was flawed. Without a comprehensive protocol that incorporates all legal requirements, the internal audit may not reflect the true level of compliance with all of the regional requirements.

As part of its comments on the Draft Audit Report, M&NP indicated that the referenced audit is not considered an internal audit or self assessment performed by the Operator as these audits are performed by the Corporate Audit Services and are independent evaluations of EHS risks, the Board’s auditors note that this process would not be considered independent or third party by commonly accepted audit practice. To be appropriately independent, auditors should not be part of the audited organization.

Compliance Status: Non-Compliant

5.0 MANAGEMENT REVIEW

5.1 Management Review

Expectations: Senior management should formally review the management and protection programs for continuing suitability, adequacy and effectiveness. The review should be based on appropriate documentation and records including the results of the surveillance, monitoring and audit programs. This review should be formal and documented and should occur on a regular basis. The management review should include a review of any decisions, actions and commitments which relate to the improvement of the programs and the company’s overall performance.

References:
OPR-99 section 55
CSA Z662-07 Clause 10.2.2(h)(iii)

Assessment:
See Appendix VII for the assessment of this element.

Compliance Status: See Appendix VII for the assessment of this element.

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