ARCHIVED - National Energy Board Onshore Pipeline Regulations, 1999 (OPR-99) Final Audit Report for Integrity Management, Safety, Environmental Protection, Emergency Management, Crossings and Public Awareness Programs - Appendix III - Environmental Protection Program Audit Evaluation Table

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Appendix III
Spectra Energy Management Inc. as General partner
and Agent for Spectra Energy Empress L.P. (SET-PTC)
Environmental Protection Program Audit Evaluation Table

Table of Contents

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:Footnote 1

OPR-99 Sections 4 and 48
CSA Z662-11 Clause 3.1.2(a)

Assessment:

SET-PTC provided an adequate and up-to-date corporate Environment, Health and Safety (EHS) policy that meets the Board’s expectations. The Policy statement and accompanying documentation outline SET-PTC’s management principles and clear program objectives. The Environmental Protection Program (EPP) is guided by these documents.

Compliance Status: Compliant

2.0 PLANNING

2.1 Hazards Identification, Risk Assessment and ControlFootnote 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 Z662-11 Clauses 3.1 and 3.1.2

Assessment:

Through its EPP documents and records, as well as interviews with staff, SET-PTC was not able to demonstrate that it had met the Board’s requirements with respect to this sub-element.

SET-PTC was able to demonstrate that it had identified some of its environmental hazards and aspects; however, in reviewing the documents provided, it would appear that the items identified and managed formally were, for the most part, limited to the requirements stated in its provincial operating permits.

During the audit, SET-PTC was unable to demonstrate that an active inventory of environmental hazards and aspects exists nor provide a procedure to proactively identify and manage new environmental hazards and aspects as they arise. During interviews with staff, the company indicated that environmental hazards and aspects are also identified through pre-job and ground disturbance checklists, project planning with consultants for new projects, and annual communications with landowners. Similarly, company staff interviewed indicated that, as part of their annual business planning, an informal risk analysis based on staff knowledge is completed on known areas of potential environmental concern. SET-PTC provided its Operational Steering Committee (OSC) Technical Risk Watch (Risk Watch) report for review. The objective of the Risk Watch, as listed on the cover page, is “to identify, communicate and manage technical risks, including Personal Safety, Process Safety, Reliability and Regulatory Risks. Goal is ZERO incidents with loss.” While it is unclear where environmental risks fit into the objective of the Risk Watch, the audit noted that an environmental risk (potential groundwater impacts to the City of Regina back up water supply) was identified, provided a risk ranking and mitigation measures were proposed. See also sub-element 5.1 Management Review.

While all of these sub-processes of the EPP will assist in the aspect identification process, all are reactionary and may preclude environmental hazards and aspects from being anticipated and/or proactively identified.

Compliance Status: Non-Compliant

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 that include updating the management and protection programs as required.

References:

OPR-99 Sections 4, 6 and 48
CSA Z662-11 Clause 3.1.1

Assessment:

Review of SET-PTC’s process for the identification and integration of its legal requirements indicated that the company’s processes did not meet the Board’s expectations.

Interviews with staff indicated that the company has contracts with several external providers in order to identify changes to legislative requirements. Environmental staff also reviews the various provincial and federal websites in order to stay current with proposed changes. Reviews of these changes are completed by the companies’ Regulatory group with input from the various subject matter experts. The implications and integration of these changes are discussed at the weekly Operations Management Team (OMT) and Area Management Team (AMT) meetings and, if deemed significant, are elevated to senior management through the OSC. It was also stated that legislative changes would not go through Management of Change (MOC) as this process is focused on physical assets only.

Through several internal tracking mechanisms, SET-PTC staff provided records listing its legal requirements at various levels of detail. For example, an inventory of provincial permit environmental requirements were outlined and monitored in appropriate detail, whereas other inventories provided either had legislative requirements that were excluded (e.g., Part 8 of the OPR) or noted at a very high level. Other than ensuring that reporting deadlines are being met, the company did not demonstrate how these legislative requirements were being integrated into its EPP. It was also unclear how or if these legal inventories provided are maintained to ensure that they are current.

The audit noted the lack of a description of the NEB OPR-99 EPP requirements and expectations that could be used in the development and evaluation of SET-PTC’s Standard Operating Procedures (SOPs), as well as audit, inspection and investigation processes. As the Board’s regulations are process and outcome focused, a clear interpretation and description of the EPP requirements in relation to SET-PTC’s facilities and associated activities is required to ensure compliance.

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 Z662-11 Clause 3.1.2(h)(ii)

Assessment:

SET-PTC was able to demonstrate compliance with this element through documentation and records provided to the Board’s auditors.

Company staff provided records indicating that, on an annual basis, senior management sets corporate goals, objectives and targets for the company that are applied and measured at each management unit on an on-going basis. The results are collected, measured and monitored by senior management as a monthly operational performance metric referred to as the SET-West OSC Monthly Scorecard (Scorecard). Interviews with company senior management indicated that off-site meetings occur throughout the year to formally discuss performance to date and implement corrective actions where required. General Managers and EHS advisors across the Spectra corporation also meet annually to discuss existing goals, objectives and targets as well as discuss what areas should be focused on for the upcoming year. It was also noted SET-PTC completes an annual plan that is specific to their business unit but aligns with the corporate strategies. Participation in the area plan development is wide spread across their business unit and once approved, it is reviewed periodically during the calendar year.

SET-PTC staff indicated that senior management has identified seven program areas for measurement and improvement and have set what they would consider to be aggressive goals for improvement in these areas. One such area includes environmental performance and appears to relate back to the corporate Policy and purpose statements. Measures being tracked that may have environmental considerations include non-compliance with provincial permits, spills and releases, and public complaints. Through the Short-Term Incentive Pay (STIP) Program, SET-PTC has also established performance measures/targets for the various teams to achieve. Of note, permit non-compliances are one such measure; however, NEB non-compliances are not included in this program.

The audit noted that NEB Assurances of Voluntary Compliance (AVCs) are currently being tracked on the Scorecard; however, no targets for continual improvement have been established. Board Inspection Officer Orders and Board Orders are not tracked on the Scorecard and therefore it is unclear whether senior management is being made aware of such enforcement measures. As the Board expects that goals, objectives and targets be developed based on risk and hazards, and not the amount of non-compliances they incur, the company is in compliance with this sub-element. See also sub-element 5.1 Management Review.

Compliance Status: Compliant

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 Z662-11 Clauses 3.1.1 and 3.1.2(b)

Assessment:

Through interviews as well as document and record review, SET-PTC was able to demonstrate that all staff with environmental responsibilities has clear role and responsibility statements applicable to their positions within the environmental or organizational structure. The company, however, was not able to demonstrate that it had an organizational structure that would allow its EPP to effectively function.

It was noted that some SET-PTC operations staff have taken on environmental responsibilities which would normally be completed by an environmental specialist. Accordingly, the Board has concluded that SET-PTC has inadequate numbers of frontline environmental staff available to support its operations staff in ensuring compliance with the Board’s expectations. As an example, pre-site environmental assessments in advance of integrity digs are completed by the pipeline integrity specialist. This specialist then decides whether a third-party environmental consultant is required to complete a formal environmental assessment. The SET-PTC environmental specialist is only involved in the integrity dig process if the project is significant and/or of abnormal nature (larger watercourse). Appropriate support could be achieved by conducting internal inspections, overseeing environmental consultants, providing training, and through process or procedural development. See also sub-element 3.4 Communications.

While the facilities associated with the SET-PTC pipeline are inspected periodically by the environmental specialist, the pipeline right-of-way (ROW) is not. SET-PTC currently has one environmental specialist to oversee the environmental aspects associated with the ROW, salt caverns and associated brine ponds (provincially regulated), and the Empress Gas Plant (provincially regulated). In interviewing this environmental specialist, it was indicated that approximately 25% of his time is dedicated to the ROW but this may vary due to projects and/or issues. Since SET-PTC does not have a complete inventory of its environmental hazards, it is unclear whether this allotment of time is appropriate to effectively manage its EPP. Further, due to the geographical scope of the SET-PTC pipeline (from Alberta/Saskatchewan border to Winnipeg, Manitoba), delegation of certain activities to operations staff does occur. An example of this would be the annual Vegetation Management Plan for the SET-PTC pipeline. The environmental specialist indicated that, while he is involved with the annual plan development, he is not involved with the implementation or evaluation of the effectiveness of the plan through inspections, as this is tasked with local operations staff. During Board inspections conducted in conjunction with this audit, an AVC was received to address vegetation or invasive plant management issues noted at several areas. During the inspection, it was apparent that a Vegetation Management Plan was being implemented, but that it was ineffective in managing several species of invasive plants. This issue, along with others identified in the Board’s inspections that could be considered routine or standard practice issues, had been on-going for some time and should have been identified by an adequate inspection program. See also sub-element 4.1 Inspection, Measurement and Monitoring.

SET-PTC indicated that a formal organization review of the EHS & Operations Services groups was completed in 2012. This review did result in realigning the accountability for EHS from the Vice President (VP) Operations to a new VP, EHS & Risk Management. The Board views this as an improvement in the organizational structure as it will promote better oversight, improve impartiality and remove local influence in decision making and reporting of issues. However, review of the documentation provided on this organizational review indicated that this review was predominately focused on the appropriate management structure, and did not consider whether there were adequate resources for SET-PTC’s EPP to effectively function.

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 Z662-11 Clause 3.1.2(g)

Assessment:

SET-PTC demonstrated that it has a formal process and dedicated staff for managing changes to its assets. However, SET-PTC’s MOC process, as demonstrated, is not considered compliant as it applies only to physical (asset) changes and not to changes required in practices or procedures that could result from:

  • changes to legal requirements;
  • changes to industry standards or practices;
  • the identification of new hazards; or
  • results of monitoring, inspections or investigations.

Further, SET-PTC’s MOC process only manages changes on a reactive basis (i.e., changes once the need has been identified). The Board’s expectation is that company MOC processes be proactive and include requirements for the identification of changes that could affect the management and protection programs (e.g., Integrity, Safety, Environmental Protection, Emergency Management, etc.).

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 requirement.

References:

OPR-99 Sections 28, 29, 30(b), 46, 48 and 56
CSA Z662-11 Clause 3.1

Assessment:

Although SET-PTC was able to demonstrate that it has invested resources in developing and implementing a formal training process, the company was not able to demonstrate compliance with the Board’s expectations regarding training and competency.

Through documentation and record review, and during interviews with staff, the company demonstrated that it has dedicated training staff that have developed a formalized training process within its Operations Management System. The process involves formal identification, assignment and monitoring of training requirements. The training program involves competency-based training and evaluation, where applicable. These formal processes and practices were appropriate in managing a training program to meet the Board’s requirements. Environmental staff interviewed indicated that, through an individual’s Performance Measure Plan, the interviewee has been able to partake in the identified training and professional development required for his position, as well as training in other non-core responsibilities (e.g., TapRooT, MOC and SAP processes). Interviews also indicated that supervisors complete annual technical competency assessments of their environmental staff.

Where the company was not able to demonstrate compliance was with respect to environmental training for its staff and contractor competency. During interviews throughout the organization, company staff identified that staff received training in regard to environmental aspects and controls as part of their on-boarding (new staff orientation) process. This training, Our Environment: Our Responsibility (OEOR), consists of several modules of which company staff are required to take depending on their role in the organization. At a minimum, all staff is required to take Modules 1 to 3 which provide an introduction to environmental responsibility and responsible actions. While a review of training records indicated that all SET-PTC employees have taken this training, there does not appear a requirement to renew this training as some personnel last took the training in 2006. As this was indicated by SET-PTC personnel to be the core of their environmental training, the Board expects that this training occur on a regular basis. The Board notes that the task specific environmental training, Modules 4 to 7, are required to be renewed every three years and a review of records indicated that all SET-PTC employees are current with this training.

With respect to the assurance of contractor competence, SET-PTC staff indicated that this is being managed and assured by a third party service provider, ISNetworld (ISN) on its behalf. The interview indicated that ISN primarily manages safety histories, insurance and workman’s compensation issues of contractors and does not evaluate the technical competency of the contractors. Operations staff also indicated that a post-job evaluation is conducted on the contractor upon completion and, if the review is unsatisfactory, this information is put on the contractor’s file. As the company was unable to provide records of these evaluations or confirm that this practice was being implemented consistently, SET-PTC could not demonstrate how it ensures the competency of its contractors. It was also noted that contractors are not required to go through the OEOR training, nor do they go through a review of the various SOPs and Standards prior to commencing a job, and that SET-PTC relies solely on the contractor’s professional qualifications.

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 28, 29, 30(b), 46, 47 and 56
CSA Z662-11 Clause 3.1.2(d)

Assessment:

Upon review of SET-PTC’s records and interviews with staff, SET-PTC was not able to demonstrate that it had met the Board’s requirements with respect to this sub-element.

Environmental staff was able to demonstrate appropriate, on-going communication practices, procedures and activities between SET-PTC and its external stakeholders. The stakeholders involved included corporate and private individuals surrounding the facilities.

While the company was able to demonstrate the effectiveness of its communication process for sharing information between senior management and staff, there did not appear to be a communication process for the sharing of information between functional groups (i.e., pipeline integrity, EHS, etc.). As previously mentioned in this appendix, results from inspections (e.g., aerial, on the ground, etc.) that have environmental considerations are not formally shared with environmental staff. This transfer of information, whether positive or negative, would assist in confirming the environmental program is effective and could identify areas for improvement.

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 Z662-11 Clauses 3.1.2(e),(f) and 10.5.1.1(d)

Assessment:

Through document and record review and interviews with staff, SET-PTC was not able to demonstrate compliance with this sub-element with respect to environmental protection.

SET-PTC demonstrated that it has a formalized process for the development, revision and management of EHS documentation. However, upon reviewing records, it was clear that this process is not consistently being followed. As one example, the SET-PTC Naturally Occurring Radioactive Materials (NORM) Standard is currently in use but has not been reviewed or updated since 2008. During interviews with SET-PTC staff, it was noted that SET-PTC has improved on its NORMs waste management practices; however, these procedural changes have not been incorporated into the Standard.

While it was evident that some operational groups are reviewing their SOPs and Standards on a regular basis, SET-PTC could not demonstrate that this was being consistently implemented across its organization.

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 Z662-11 Clause 10.3.2

Assessment:

During the audit, the company was not able to demonstrate compliance with this sub-element.

Review of the company’s implemented practices indicated that it has developed a significant amount of proceduralized controls for items contained in its provincial permits. Review of these procedures and accompanying records indicated that they were appropriate, and that they were being implemented as designed.

However, as noted in sub-element 2.1 Hazards Identification, Risk Assessment and Control, and elsewhere, the company has significantly limited its formal environmental hazard identification and accompanying controls to its provincial permit requirements. While addressing provincial permits does address the majority of the significant issues, it does not ensure adequate control of all of the hazards, aspects and legal requirements that require attention.

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 consequence 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 Z662-11 Clauses 3.1, 3.2 and 10.5.2

Assessment:

Review of SET-PTC’s documents and records, as well as interviews with staff indicated that, notwithstanding the finding of non-compliance with sub-element 3.6 (Operational Control – Normal Operations), SET-PTC was able to demonstrate that it has appropriate controls to minimize, respond to, or mitigate, the environmental effects associated with upset or abnormal operating conditions of its operating processes. The formal procedures, including emergency management, that have been developed included the high-risk hazards that should be addressed. Further, it was noted that environmental-related processes and procedures included practices to be implemented if abnormal or upset conditions were detected or were occurring.

SET-PTC was able to demonstrate that its staff is being trained and is implementing the procedures and practices as described in the documents. To further enhance their emergency management expertise, it was noted that SET-PTC employees participate in regional and national spill preparedness and response organizations.

Compliance Status: Compliant

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 Z662-11 Clauses 3.1.2, 10.9.2.5, 10.9.2.6 and 10.9.2.8

Assessment:

SET-PTC was not able to demonstrate compliance with the Board’s expectations.

During the audit, company staff indicated that there are a number of formal and informal ways that SET-PTC inspects and monitors its right-of-way and associated facilities. Document and record review, as well as interviews with staff, indicated that SET-PTC had developed and implemented appropriate monitoring and inspection practices and procedures for ensuring the safe operation of its pipeline and associated facilities. However, as noted elsewhere in this appendix, interviews with staff, and document review confirmed that the company has not developed or implemented an appropriate process for conducting the environmental portion of these inspections. It was indicated during interviews with environmental staff that bi-annual environmental inspections are completed and documented, and that necessary corrective action plans are sent to the AMT for implementation. However, in reviewing the records, these inspections have been focused on the facilities associated with the SET-PTC pipeline and do not include the ROW. The audit noted that there are various types of inspections completed by operations staff on the ROW such as pre-site inspections for new projects, annual above-ground surveys (100 km walked per year), bi-weekly aerial surveys, weekly vegetation inspections, weekly and monthly facility inspections, and quarterly valve inspections. While this list is comprehensive, SET-PTC could not consistently demonstrate that the operations staff completing these inspections is appropriately trained to assess the effectiveness of SET-PTC’s EPP. In addition, records from these inspections do not clearly identify potential environmental aspects that could be observed. This could lead to certain, and significant, environmental aspects in being overlooked.

Compliance Status: Non-Compliant

4.2 Corrective and Preventive Actions

Expectations:

The company shall have a process to investigate incidents or any non-compliance 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 Z662-11 Clauses 3.1.2(g) and (h)

Assessment:

SET-PTC was able to demonstrate, through document and record review, that it has developed and implemented appropriate incident investigation processes. SET-PTC was able to demonstrate that it has adequate processes in place to identify, develop and implement corrective and preventive actions that may be identified in its management or incident 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 Z662-11 Clauses 3.1, 9.11, 10.4 and 10.5.1.1

Assessment:

During the audit, the company was not able to demonstrate full compliance with this sub-element.

While all records requested were readily retrieved, it was indicated during interviews that the company lacked a formalized process for email correspondence retention. The company has established that all unfiled emails will be deleted after three months and those that have been moved to a folder are deleted after two years. Individual staff have established their personal method in ensuring that these records are maintained; however, the Board is concerned that, without a formal filing process, certain email correspondence which contain compliance information may be deleted and not easily accessible in the event of an investigation.

Compliance Status: Non-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 Z662-11 Clauses 3.1.2(c) and (h)(iii)

Assessment:

During the audit the company demonstrated that it has two processes for conducting audits of its facilities. These processes were implemented by staff from Calgary, Alberta or in its head office in Houston, Texas. Interviews with the company indicated that the internal audits are completed to confirm program compliance and would not necessarily confirm legislative compliance. The Board examined these processes, and management thereof, and has determined the company would meet the Board’s requirements provided that the EPP was in compliance.

During the audit, the company provided copies of internal audits conducted by its Houston-based EHS auditing group. Review of the internal audit records indicated that an appropriate process had been developed for conducting the audit and managing the results through to implementation of the corrective action plans for noted deficiencies. However, the Board was unable to confirm that SET-PTC has conducted an internal audit on its EPP.

Also, the audit process did not meet the requirements contained in the OPR-99. The OPR-99 requires that audits be undertaken to ensure compliance with relevant portions of the National Energy Board Act, theOPR-99 itself,, any terms and conditions of any certificate or order issued by the Board and the company’s EPP. Review of the company protocols indicated that the audit did not meet these requirements. The audit protocols and results did not contain itemized lists of the regulatory or certificate requirements, nor did they contain appropriate audit definitions of the Board’s outcome-based program requirements to evaluate against.

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 Z662-11 Clause 3.1.2(h)(iii)

Assessment:

Interviews and record reviews indicate that the EPP undergoes regular review by SET-PTC’s area management, operations management and senior management teams. SET-PTC’s senior management also holds meetings on a regular basis at different field locations to evaluate the operations of the pipeline and associated facilities.

While the Board acknowledges review of the EPP by senior management, based on the non-compliances identified in sub-elements 3.1 and 4.4, the Board is not satisfied that management review has been undertaken with a view to ensuring the EPP’s continuing suitability, adequacy and effectiveness. The Board views compliance and findings for these sub-elements to rest with senior management. The Board expects senior management to ensure and demonstrate that there are appropriate human resources to operate its pipeline system. Further, the Board is of the view that senior management is responsible to ensure that the EPP is audited and internal inspections are completed on a regular basis.

Also, as previously mentioned in sub-element 2.1, the OSC Risk Watch report for SET-PTC is used “to identify, communicate and manage technical risks, including Personal Safety, Process Safety, Reliability and Regulatory Risks. Goal is ZERO incidents with loss.” The Board is concerned about the lack of environmental focus in the program’s objective which could lead to significant environmental risks/issues in being overlooked. In reviewing the risk assessment and the results of this process for the 2012 SET-PTC Risk Watch, it is clear that the highest risks are associated with potential business continuity issues (i.e., integrity of the system) whereas other risks, such as known environmental issues, are assessed a lower risk ranking. The Board views the safety of the public, and those people working in or around this pipeline system, of the utmost importance. However, known environmental issues, such as the potential risk of contamination to a groundwater supply, are equally important in ensuring the safety of the public and should have the same risk assessment rigor applied.

As referenced in sub-element 2.3 this appendix, effort has been put forth by senior management to track and measure performance related to permit non-compliances. This includes having this measure built into the company’s performance pay system (STIP). NEB AVCs have since been added to the company scorecard; however, no targets have been established for which the company can measure performance. Board or Inspection Officer Orders are not be tracked nor could SET-PTC demonstrate in the audit that these enforcement actions are discussed at the senior management level.

Compliance Status: Non-Compliant

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