ARCHIVED - Final Audit Report of the TransCanada Public Awareness Program - Appendix I - Public Awareness Program Audit Evaluation Table

Appendix I

TransCanada Pipelines Limited and NEB-regulated Subsidiaries (TransCanada)

Public Awareness Program Audit Evaluation Table^[i]

• 1.0 Policy and Commitment
  • 1.1 Leadership Accountability
  • 1.2 Policy and Commitment Statements
• 2.0 Planning
  • 2.1 Hazard Identification, Risk Assessment and Control
  • 2.2 Legal Requirements
  • 2.3 Goals, Objectives and Targets
  • 2.4 Organizational Structure, Roles and Responsibilities
• 3.0 Implementation
  • 3.1 Operational Control-Normal Operations
  • 3.2 Operational Control-Upset or Abnormal Operating Conditions
  • 3.3 Management of Change
  • 3.4 Training, Competence and Evaluation
  • 3.5 Communication
  • 3.6 Documentation and Document Control
• 4.0 Checking and Corrective Action
  • 4.1 Inspection, Measurement and Monitoring
  • 4.2 Investigating and Reporting Incidents and Near-misses
  • 4.3 Internal Audits
  • 4.4 Records Management
• 5.0 Management Review
  • 5.1 Management Review

1.0 POLICY AND COMMITMENT

1.1 Leadership Accountability

Expectations: The company shall have an accountable officer appointed who has the appropriate authority over the company’s human and financial resources required to establish, implement and maintain its management system and protection programs, and to ensure that the company meets its obligations for safety, security and protection of the environment. The company shall have notified the Audit Team of the identity of the accountable officer within 30 days of the appointment and ensure that the accountable officer submits a signed statement to the Audit Team accepting the responsibilities of their position.

References: PCR Part II section 4; OPR sections 6.1, 6.2, 40, 47, 48

Finding:

Following the release of the amended OPR on 10 April 2013, the National Energy Board (Board or NEB) gave its regulated companies 30 days to submit written notice of compliance with the provision as well as the name of its appointed accountable officer. On 10 May 2013, TransCanada submitted its written notice to the NEB indicating that its Executive Vice President of Operations and Major Projects had been appointed as accountable officer for TransCanada and all of its subsidiaries. In its submission, TransCanada confirmed that its accountable officer has the authority over the human and financial resources required to meet the Board’s substantive expectations.

Since the position of accountable officer was introduced into the OPR in April of 2013 and the audit commenced in June 2013, the accountable officer role at TransCanada had been in effect for approximately 2 months. The accountable officer had not, therefore, completed an annual planning cycle to adequately fulfill the responsibilities of the role. The Board is not in a position to assess at this time, the performance of TransCanada’s accountable officer relative to its substantive expectations for this sub-element. In this context, the Board finds TransCanada to be Compliant for this sub-element.

Compliance Status: Compliant

1.2 Policy and Commitment Statements

Expectations: The company shall have documented policies and goals intended to ensure activities are conducted in a manner that ensures the safety and security of the public, workers, the pipeline, and protection of property and the environment. The company shall base its management system and protection programs on those policies and goals. The company shall include goals for the prevention of ruptures, liquids and gas releases, fatalities and injuries and for the response to incidents and emergency situations.

The company shall have a policy for the internal reporting of hazards, potential hazards, incidents and near-misses that includes the conditions under which a person who makes a report will be granted immunity from disciplinary action.'

The company’s accountable officer shall prepare a policy statement that sets out the company’s commitment to these policies and goals and shall communicate that statement to the company’s employees.

References: PCR Part II section 4; OPR sections 6.1, 6.3, 40, 47, 48

Finding:

As a component of TransCanada’s Health, Safety and Environment (HS&E) framework, the Public Awareness Program (PA Program) follows the HS&E Commitment Statement Guiding Principle document. This document includes the statement "we conduct our business so it meets or exceeds all applicable laws and regulations and minimize risk to our employees, the public and the environment". The Commitment statement is reviewed annually and signed by the CEO, the accountable officer and the Vice President of Community, Safety and Environment. The statement is communicated to employees on the Intranet and was posted in both head office and field locations visited during the course of the audit.

The policy for the PA Program can be found in the Public Awareness Program Manual (the PA Manual). Developed and maintained by the PA Program Manager and signed off by the Director of Regulatory Compliance, the document is revised annually and made available in the TransCanada Operating Procedures (TOPs) database for the Regional Coordinators to use as the basis for their respective regional PA plans. According to the 2013 PA Manual, the scope of TransCanada’s PA Program applies to all the wholly and partially owned pipeline facilities and is mandated to provide safety messages on purpose and reliability, leak recognition and response and damage prevention awareness". It also "provides safety messaging on purpose and reliability, leak recognition and response and damage prevention awareness including call before you dig".

Section 4.2 of the PA Manual contains the overarching PA policy. It reads "Safety is a core value at TransCanada where we make safety - for ourselves, each other, our contractors and for members of our communities- an integral part of the way we work. Our Public Awareness Program educates our stakeholders about living and working safely near our pipeline."

With the promulgation of the amended OPR, the Board has clarified its expectations for management systems including what is required content for the policies that govern protection programs including the PA Program. As per the OPR, companies must have policies for the internal reporting of hazards, potential hazards, incidents and near misses that includes the conditions under which a person who makes a report will be granted immunity from disciplinary action.

At the time of the audit, TransCanada had not adopted a policy that meets the above mentioned criteria for its HS&E programs which includes the PA Program. While the purpose of the PA Program is documented in the Manual, TransCanada did not demonstrate that it has a policy for its PA program that meets the requirements of the Board. Review of TransCanada’s Code of Business Ethics identified that it includes the requirement for staff to report any actual or suspected violation of the law without fear of retaliation. In the Board’s view, this document does not adequately address the requirements as it is limited to violations of the law and does not clearly include hazards and potential hazards. TransCanada has also implemented an Incident Management Program to manage the reporting of violations, hazards and potential hazards that "encourages notification of all incidents". The Board has determined that it is not explicit from these documents that staff who reported a hazard or near miss within the PA Program would be granted immunity from disciplinary action. Therefore the Board has determined that, at the time of the audit, TransCanada had not adopted a policy that meets the OPR requirements.

TransCanada demonstrated that it has established and implemented an HS&E Commitment Statement, an Incident Management Program and a Code of Business Ethics that include protection of the public, workers and the environment and immunity from disciplinary action for employees that report any actual or suspected violation of the law. Following review, the Board has determined that these documents do not demonstrate the existence of policies for the internal reporting of hazards, potential hazards, incidents and near-misses that includes the conditions under which a person who makes a report will be granted immunity from disciplinary action. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

2.0 PLANNING

2.1 Hazard Identification, Risk Assessment and Control^[1]

Expectations: The company shall have an established, implemented and effective process for identifying and analyzing all hazards and potential hazards. The company shall establish and maintain an inventory of hazards and potential hazards. The company shall have an established, implemented and effective process for evaluating the risks associated with these hazards, including the risks related to normal and abnormal operating conditions. As part of its formal risk assessment, a company shall keep records to demonstrate the implementation of the hazard identification and risk assessment processes.

The company shall have an established, implemented and effective process for the internal reporting of hazards, potential hazards, incidents and near-misses, and for taking corrective and preventive actions, including the steps to manage imminent hazards. The company shall have and maintain a data management system for monitoring and analyzing the trends in hazards, incidents, and near-misses.

The company shall have an established, implemented and effective process for developing and implementing controls to prevent, manage and mitigate the identified hazards and risks. The company shall communicate those controls to anyone exposed to the risks.

References: PCR Part II section 4, OPR sections 6.1, 6.5(1)(c), (d), (e), (f), (r), (s), 40, 47, 48

Finding:

According to the TransCanada PA Program, one of its main goals is to "increase awareness of pipeline safety thus protecting the public, the environment and our facilities." During interviews, PA staff confirmed that they identify hazards by reviewing reports of third party encroachment activity as well as a breakdown of the reported unauthorized activities in each region. This information is reviewed by the Regional Coordinators for incorporation into the respective regional plans. The Regional Plan Overview template includes a list of risks that are common to all regions, such as landowner turnover and urban encroachment. The template also includes space for each regional representative to identify unique risks in their respective regions, such as logging activity. It is then up to each regional Community and Aboriginal Relations Liaison to incorporate the measures that will address the unique risks identified.

Head Office develops one PA Manual that provides the PA framework and templates for regional plans for all of its regions. This PA Manual describes the program’s overall purpose and objectives. On an annual basis, each Regional Coordinator uses the PA framework document and template to develop the respective Regional Plan Overviews in order to incorporate flexibility to meet the unique needs of each region that it operates in. The Regional Plans describe the tactics, strategies and activities that mitigate the risks for each region.

As part of the document sampling process, this audit reviewed the PA regional plans that affect the NOVA system, which include the Wildrose Region, the Rocky Mountain Region, and Central Region. The audit also included a review of the Regional Plan for the Eastern Region which includes Southern Ontario and Quebec.

Review of the Regional Plans confirmed they are based on a list of standard "Potential Regional Risks" as well as unique "Regional Risks". Each Regional PA Coordinator completes the table by identifying the risks and associating the risk with a stakeholder, the method for addressing the risk, a plan for each category and the required resources to mitigate the risks. Along with the PA Regional Plan table, each region may choose to address a particular regional concern. An example of where this process was demonstrated at the regional level was in the case of logging companies. This group was identified as requiring additional safety awareness so a fact sheet was developed and sent to local known logging companies to notify them of the requirement to call before they crossed pipeline rights of way (ROW) with logging trucks where there is no developed public road.

The audit notes that TransCanada has a process whereby it links known hazards to controls in its PA Program. However, the Board requires that companies establish and implement an inventory of all hazards and potential hazards as well the process required for evaluating the hazards and managing the risks associated with the identified hazards. In light of those requirements, the audit has determined the following for TransCanada’s PA Program:

• TransCanada did not demonstrate that it has implemented a process to identify all of the hazards posed by third parties working around its facilities. Although the regional PA plan templates include a list of "Potential Regional Risks", the audit determined that the list does not constitute an exhaustive inventory of hazards that corresponds to those risks identified through unauthorized activities. Instead, the list of regional risks is comprised of typical hazards associated with land adjacent to rights of way, select unauthorized activities and issues that are typically addressed by the company itself such as depth of cover, permits, and environmental concerns.
• Although TransCanada commissions surveys of new developments along the ROW, there was no demonstration of a process that includes the integration of proactive or anticipatory hazard identification into the PA Program.

Although TransCanada demonstrated that it has established and implemented a PA Program that incorporates the identification of hazards and introduces some controls, it was not able to demonstrate that it has established an exhaustive inventory, a process to evaluate the risk or a systematic implementation of corresponding controls as required by the Board’s expectations. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

2.2 Legal Requirements

Expectations: The company shall have an established, implemented and effective process for identifying and monitoring compliance with all legal requirements that are applicable to the company in matters of safety, security and protection of the environment. The company shall have and maintain a list of those legal requirements. The company shall have a documented process to identify and resolve non-compliances as they relate to legal requirements, which includes updating the management and protection programs as required.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(g),(h),(i), 40, 47, 48

Finding:

TransCanada tracks changes in legal requirements using various methods including a third party subscription service that monitors various government and regulatory agencies and notifies subscribers by email when changes to relevant regulations are announced. TransCanada also monitors its regulatory requirements as well through regular monitoring of government websites and participation in industry groups such as the Canadian Energy Pipelines Association. Legislative changes are then entered into the Incident and Issue Tracking (IIT) database as an issue and then delegated to the appropriate staff to action any changes required. TransCanada demonstrated that communication was occurring regarding legislative change by email from the Regulatory Compliance Group. According to TransCanada, legal requirements are listed in the TransCanada Operating Procedures (TOPs) database. As a result, the TOPs database tracks the relevant legislation associated with the procedures as well as the driver, the contact who is responsible for managing the TOP and any changes that are required. The database lists the regulation and has the functionality that allows staff to click on the regulation listed. According to the process, TOP owners in the respective business units are responsible for monitoring the legal requirements that will impact its procedures.

Along with the process that is part of updating TOPs, TransCanada provided its Legislative Monitoring Process document for review. According to this document, "TransCanada monitors legislation for any regulatory changes having the potential to impact TransCanada’s pipe, energy and gas storage in Canada". The document also outlines that it is the Directors or Vice Presidents of the business unit impacted by the regulatory change that would be accountable to ensure conformance to Company Standards and Specifications, to the regulatory requirements". In Canada, the Canadian Pipeline Operations - Compliance and the Canadian Gas Storage groups are accountable for the monitoring and interpretation of legislative changes. The record review confirmed that this group communicates regulatory changes or potential regulatory changes to internal TransCanada stakeholders in order to prepare a response or gather feedback on new or potential changes to legal requirements. For the PA Program the audit found that the TOPs regulations list does include some regulatory requirements and also includes some Codes and Standards (American Petroleum Institute 1162) that are related to public awareness. Although TransCanada has developed a list of relevant legislation, according to its own Legislative Monitoring Process "the list is not all inclusive or indicative of all of the Acts, Codes, Regulations, Directives etc. required to be reviewed in developing the Company’s written Policies, Programs and Procedures". This list consists of relevant legislative titles and does not include all specific provisions within the legislation. Document review confirmed that the legal list, dated 2011, does not include Board Orders such as the MO-2010-20 (Low-Risk Agricultural Crossings) or the recent NEB Administrative Monetary Penalties (AMPs) legislation.

The audit also found that TransCanada does not have an effective process for the communication of changes in legal requirements with field staff. Interviews with field staff confirmed that they were aware of the regulation list that is part of the TOPs database. However, when asked about the recent amendments to the NEB Act or the AMPs regulations, PA field staff were unaware of any specific regulatory changes that could potentially impact the PA Program and the third parties it seeks to inform. These changes to the NEB Act and the promulgation of the AMP regulations could result in consequences for TransCanada and its third party stakeholders of the PA Program. Specifically, the amendments to the NEB Act in July 2012 included changes to Section 112 (8) which states that:

"Every person who contravenes subsection (1) or (2)...is guilty of an offence and liable:

• on summary conviction, to a fine not exceeding one hundred thousand dollars or to imprisonment for a term not exceeding one year or to both or
• on conviction on indictment, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding five years or both"

Although the changes were introduced in 2012, they were not reflected in the 2013 PA Program to inform the third parties, nor was there any mention of the changes in the communication plan with PA field staff.

While TransCanada did demonstrate that it is tracking, listing and communicating some of its legal requirements, it did not demonstrate that it has an inventory of specific legal requirements or a process to ensure that regulatory changes trigger program changes or communication to all staff involved in the PA Program. Therefore, TransCanada did not demonstrate that it has an established, implemented and effective process for identifying and monitoring compliance with all legal requirements that are applicable to the company in matters of safety, security and protection of the environment as required by the Board’s expectations. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

2.3 Goals, Objectives and Targets

Expectations: The company shall have an established, implemented and effective process for developing and setting goals, objectives and specific targets relevant to the risks and hazards associated with the company’s facilities and activities (i.e., construction, operation and maintenance). The company’s process for setting objectives and specific targets shall ensure that the objectives and targets are those required to achieve its goals, and shall ensure that the objectives and targets are reviewed annually.

The company shall include goals for the prevention of ruptures, liquid and gas releases, fatalities and injuries, and for the response to incidents and emergency situations. The company’s goals shall be communicated to employees.

The company shall develop performance measures for assessing the company’s success in achieving its goals, objectives, and targets. The company shall annually review its performance in achieving its goals, objectives and targets and the performance of its management system. The company shall document the annual review of its performance, including the actions taken during the year to correct any deficiencies identified in its quality assurance program, in an annual report, signed by the accountable officer.

References: PCR Part II section 4, OPR sections 6.1, 6.3, 6.5(1)(a),(b), 6.6, 40, 47, 48

Finding:

TransCanada described its process for establishing and measuring its performance as an integrated approach that is accomplished through its Corporate Performance Scorecard. The Corporate Scorecard is the result of the integration of scorecards from each level of organization. The scorecards are designed to monitor the company’s performance in identified Key Performance Areas (KPAs) by measuring certain Key Performance Indicators (KPIs). At the corporate level the KPAs reflect business goals with KPIs as the indicators of success in that area. These KPIs and KPAs are then reflected in program, team and individual goals. To integrate employee performance into the corporate KPAs and KPIs, TransCanada uses the Peak Performance management tool.

During interviews, PA staff stated that the PA Program has goals, objectives and targets that are developed in line with the corporate KPAs and KPIs and integrated into the regional plan templates. According to the Manual, TransCanada’s PA Program "strives to enhance public safety and reduce the risk of environmental and property damage through increased public awareness and knowledge". The PA Manual outlines the objectives of the PA Program and how they are broken down under 3 headings:

• Management and implementation of the Public Awareness Program;
• Prevention and Response; and
• Public Awareness of TransCanada’s pipelines.

According to the PA Manual, the PA Program includes program objectives including:

• the reduction of unauthorized activities by 5%;
• statically measure effectiveness of TransCanada’s safety messages with the affected public; and
• number of information packages that were sent out by audience type.

The PA annual assessment also includes program improvement objectives including initiatives such as streamlining and enhancing internal communication processes as well as improving access to program information. Document review confirmed that these objectives and targets are being reported to the PA Steering Committee on a quarterly basis.

The Board’s audit identified that TransCanada has developed and implemented an internal program for the establishment and management of corporate commitments and priorities with respect to the PA program and HS&E management in general. The Board was also able to determine that TransCanada has implemented documented processes for communicating and monitoring the requirements derived from the commitments and priorities its PA Program establishes. While TransCanada demonstrated that there is a process for measuring and reporting on PA Program performance, the audit could not confirm that there is a process for setting goals or developing performance measures at the senior management level.

The audit identified that, at the corporate level, TransCanada uses multiple and varied terminology to describe compliance with the Board’s requirements relating to Goals, Objectives and Targets (GOTs). While there was some consistency demonstrated by TransCanada with respect to its Peak Performance program, there was a marked lack of consistency in describing TransCanada’s specific HS&E or PA Program GOTs. In reviewing the information provided, the audit noted that TransCanada links its PA Program to the Key Focus Area titled "Safety& Environmental Compliance" which can be found in the Peak Performance insert card. However, TransCanada also refers to the Corporate Performance Scorecard which uses the term Key Performance Area and it is not clear how the Key Focus Areas are reflected at this level because it now includes measures of "Safety Performance" and "Compliance".

During interviews at the management level, TransCanada staff articulated multiple terms interchangeably in their description of these GOTs. Consequently, during the audit, and in order to advance the Board’s assessment of this sub-element, Board auditors requested clarification from TransCanada via a table of concordance to confirm the appropriate linkages between TransCanada’s varied internal terminology and the regulatory requirements. This table was not, however, provided to Board auditors during the audit. As a result, the Board is unable to find TransCanada compliant with the Board’s expectations in this sub-element. In developing any Corrective Action Plan for this finding, TransCanada shall demonstrate clearly how it is meeting these expectations. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

2.4 Organizational Structure, Roles and Responsibilities

Expectations: The company shall have a documented organizational structure that enables it to meet the requirements of its management system and its obligations to carry out activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment. The documented structure shall enable the company to determine and communicate the roles, responsibilities and authority of the officers and employees at all levels. The company shall document contractors’ responsibilities in its construction and maintenance safety manuals.

The documented organizational structure shall also enable the company to demonstrate that the human resources allocated to establishing, implementing and maintaining the management system are sufficient to meet the requirements of the management system and to meet the company’s obligations to design, construct, operate or abandon its facilities to ensure the safety and security of the public and the company’s employees, and the protection of property and the environment. The company shall complete an annual documented evaluation in order to demonstrate adequate human resourcing to meet these obligations.

References: PCR Part II section 4; OPR sections 6.1, 6.4, 20, 31, 40, 47, 48

Finding:

Guidance, direction and approval to the PA Program is provided by several branches of TransCanada through the PA Steering Committee. The PA Steering Committee is comprised of the Vice President Pipeline Safety and Regulatory Compliance, the Vice President of Community, Safety and Environment, the Vice President of Pipeline Integrity, the Vice President Stakeholder Relations and the Vice President of Operations and Engineering. TransCanada was able to demonstrate that its PA Program is positioned to support the public interaction aspects of several branches of TransCanada business and these business units are represented on the PA Steering Committee.

As the guidance document for the PA Program, TransCanada’s PA Manual contains the descriptions of the roles and responsibilities for each group or position that forms part of the PA program. According to the PA Manual, the PA Program Manager is the primary Pipeline Safety and Regulatory Compliance contact person accountable for the PA Program. The PA Program Manager receives guidance from the PA Steering Committee which is made up of the Vice Presidents from each of the departments that are supported by the PA Program. Reporting to the Director of Regulatory Compliance, the PA Program Manager is responsible for the overall development and monitoring of the PA Program across North America. Working out of the Head Office, this position is also accountable for the development and annual revision of the PA Manual as well as overall guidance, strategic direction budgets, and regional program monitoring. The PA Program Manager leads a small group of PA staff at the Head Office who manage centralized projects like the system-wide calendar mail-outs and feedback mechanisms and other external communication initiatives.

TransCanada has divided its Canadian facilities and assets into five operational regions. These regions are the Wildrose Region, Rocky Mountain Region, Central Region, Northern Ontario Region and Eastern Region. TransCanada’s PA Program is implemented across the system following its regional structure. It is developed and implemented across the 5 Canadian regions based on "dotted-line" relationships between Program Manager and Regional Community Relations Liaisons. The Regional Community Relations Liaisons are responsible for the planning, implementation and effectiveness of regional PA initiatives. There are annual and quarterly meetings between the Program Manager and the Regional Community Liaisons to discuss the PA program. They work collaboratively and receive direction from the PA Program Manager regarding the PA Program but they are managed by and report directly to their respective Area Managers. The Area Managers are responsible for the resources including hiring contractors to support the PA Program in their regions when required. TransCanada uses contractors and some retired pipeline technicians to conduct public awareness visits in some regions in order to meet established targets for stakeholder visits. These contractors are hired and evaluated through the TransCanada procurement and management process.

In order to communicate roles and responsibilities as well as manage employee performance, TransCanada documents each employee’s responsibilities in Role Profiles and Performance Agreements. Each TransCanada employee’s role profile is provided during the onboarding process. The role profile contains the key competencies, functional competencies and behavioural competencies for each position. The role profiles are reviewed and revised annually during employee performance reviews. The Performance Agreements are the employees’ line of sight performance evaluation documents with the corporate objectives. In order to assess the resources required for the PA program, Senior Management review several factors in the department scorecards such as amount of overtime performed by staff and size of project.

Interviews and document review during the audit confirmed that PA staff at the Head Office and in the regions understood their roles and responsibilities in the PA Program. They consistently referred to the PA Manual as the guidance document for outlining responsibilities in the PA Program and identified the Role Profile as their source of understanding for receiving feedback on their performance. Both the dotted-line relationship with the Program Manager and the reporting relationship with the Area Manager were understood.

Based on the information provided by TransCanada during the audit, the Board did not identify any Non-compliances with TransCanada’s processes and established hierarchy of responsibility within the PA program. As a result, the Board views this process as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

3.0 IMPLEMENTATION

3.1 Operational Control-Normal Operations

Expectations: The company shall have an established, implemented and effective process for developing and implementing corrective, mitigative, preventive and protective controls associated with the hazards and risks identified in elements 2.0 and 3.0, and for communicating these controls to anyone who is exposed to the risks.

The company shall have an established, implemented and effective process for coordinating, controlling and managing the operational activities of employees and other people working with or on behalf of the company.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(e),(f),(q), 40, 47, 48

Finding:

TransCanada’s PA Manual outlines the overall goals, strategies and tactics for the PA Program. Staff interviewed stated that each year, TransCanada reviews its PA Program goals and applies a risk based approach to develop its outreach tactics and program targets for the program as a whole. At the regional level, the regional PA plans are based on a template that includes a number of risks that are common to all regions that have been determined based on regional knowledge, feedback from internal staff, Incident and Issue Tracking (IIT) of unauthorized activities and industry trends. There is also the expectation that the Regional Plans incorporate risks identified as being unique to their region.

In order to ensure that its external stakeholders receive consistent awareness material, TransCanada delivers a large part of its awareness material through mail-outs managed out of the Head Office. TransCanada’s Head Office is responsible for the mail-outs of awareness material to its various external stakeholders across the system according to the following schedule:

• affected public is to be contacted at least once every 2 years through the distribution of an awareness package with all relevant baseline messages;
• excavators and contractors who operate within the vicinity of TransCanada ROW are to be contacted once every year;
• emergency officials are to be contacted once a year; and
• public officials are to be contacted once every three years.

For their part, the Regional Offices develop local strategies for contacting these groups including providing awareness sessions to Emergency Officials or working with Municipal Districts. Despite the fact that TransCanada claims to have one set of procedures for its PA Program for all regions, the audit noted significant differences in the way that the regions address similar risks without a rationale.

One example of inconsistency between the Regional Plans involves the use of face to face visits as a way to provide awareness to landowners. According to the most current regional plans for the Wildrose Region, the Rocky Mountain Region and the Central Region, TransCanada staff and land agent contractors are used to provide awareness with new landowners or those landowners that will be affected by pipeline maintenance projects. Interviews and document review confirmed that the focus in these regions was on new landowners who live near new developments along TransCanada rights of way (ROW), in the case of pipeline maintenance projects, or as follow-up of an unauthorized activity. Whereas in the Eastern Region, TransCanada contracts most of the land agent duties including approximately 1600 scheduled landowner awareness visits to the Groupe Conseil UDA Inc. to ensure that each of its landowners are contacted in person on a 3 year cycle regardless of project activity in the area. TransCanada provides instructions to the contracted land agents to ensure that, along with providing them with an information package, they address:

• how to reduce the likelihood of accidental damage to the pipeline;
• awareness of the NEB requirements when working around pipelines;
• accuracy of the contact information and whether or not there is a tenant situation;
• awareness of the presence of the pipeline; and
• awareness of Info-Excavation and that they should call them prior to performing any excavation work.

The audit determined that TransCanada did not demonstrate a process for developing and implementing consistent controls for its hazards. Specifically:

• TransCanada did not demonstrate that the proposed mitigation strategies in the Regional PA Plans correspond to the appropriate level of mitigation for each risk listed. Document review indicated that the plans, tactics and strategies outlined in the Regional Plans did not correspond to all the risks listed in each Regional Plan therefore leaving some risks unmitigated.
• TransCanada did not demonstrate that it has an effective process for developing and implementing controls to prevent, manage and mitigate the identified hazards and risks that is consistent across all regions. For example, the plans for the Western Canadian regions include identical lists of risks to that of the Eastern Region and yet the controls identified to mitigate the risks are not the same. In the West, the PA Plans indicate that TransCanada will address the risks by attending trade shows and local synergy meetings. Landowner visits are only to be conducted with identified new landowners or "landowners who have not had contact frequently". Whereas, the Eastern Region plan includes provisions for its landowners to be visited on a 3 to 5 year cycle which results in approximately 1600 landowner visits per year to residents.

Based on the inconsistent processes used by the different regions and the lack of justification provided for the inconsistent approach, the Board determined that TransCanada did not demonstrate that it has a process for determining that it has implemented the appropriate controls to address its hazards. For example, in order to mitigate the hazards introduced by landowners and their activities, TransCanada’s main source of landowner awareness material consists of an annual calendar mail-out in December. TransCanada did not demonstrate how it has determined that the calendar is adequate as the sole method of communicating annually with the majority of its landowners especially given that the majority of unauthorized activities occur in the spring and summer. As well, there were other discrepancies noted in the implementation of the PA Program across the regions with no rationale provided:

• Verification of the accuracy of the landowner information takes place following the annual calendar mail-outs. TransCanada staff and contracted land agents make corrections when the calendars are sent back "return to sender" or the new residents contact them to correct the addressee information. This process relies heavily on the new residents self-identifying by returning mail and could result in inaccuracies in the line list. This line list information is important for the operations and maintenance projects as well as in an emergency situation. Also, as new landowners, they are considered "risks" because of the potential for lack of awareness of how to work safely around pipelines.
• For the Western Region, damage prevention and safety awareness information is mailed to TransCanada’s known landowners. Tenants who are renting properties along the ROW may receive awareness material only in the case of a project, or following an unauthorized activity.

Although TransCanada demonstrated that it has established an overarching PA Program and regional implementation of its PA Program, it did not demonstrate that it has implemented a process for the evaluation of PA activities to ensure the effective control of the identified hazards. The absence of a consistent process is reflected in the program implementation differences between the regions without rationale. As a result, the Board has determined that this sub- element is Non-Compliant.

Compliance Status: Non-Compliant

3.2 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 upset or abnormal events). The company shall have an established, implemented and effective process for developing contingency plans for abnormal events that may occur during construction, operation, maintenance, abandonment or emergency situations.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(c),(d),(e),(f),(t), 32, 40, 47, 48

Finding:

Review of the PA Plan, the regional plans as well as staff interviews confirm that there are overlaps and linkages between the PA Program and the ongoing education program for emergency responders. In fact, the TransCanada PA Program staff has a supporting role in the implementation of the continuing education, public notification and awareness aspects of TransCanada’s Emergency Management Program (EM). According to the PA Manual, one of the 3 objectives of the PA Program is to increase public awareness and knowledge of prevention and response of a pipeline emergency. TransCanada’s PA Program also incorporates promotion of awareness among the affected public that resides within 750 meters of the pipeline in rural areas and 250 meters of the pipeline in urban settings. TransCanada defines affected public as people who live or work along TransCanada’s rights of way as well as places of congregation. PA staff in the field locations also provides support to the Emergency Management program by training to assist in the event of an emergency situation. Interviews confirmed that several field staff from the PA Program are part of the Emergency Preparedness Team focusing on the communications aspects. PA staff at several field locations indicated that they participate in the regional emergency exercises as well as table tops.

The PA Program also supports the ongoing education of first responders by organizing the annual mail-outs. Part of the PA Program’s mandate is the continuing education and awareness of first responders such as police and fire departments and volunteer fire departments who are stationed along the TransCanada rights of way. PA staff represents TransCanada by attending and sometimes presenting at events such as the regional Fire Chief Association conferences on behalf of the TransCanada Emergency Management Program.

TransCanada was able to demonstrate that its PA Team plays a role in supporting the Emergency Management Program by leveraging its awareness mail-outs and outreach activities to include aspects of ongoing education of the plans and procedures to identify the potential for upset or abnormal operating conditions, accidental releases, incidents and emergency situations. As a result, the Board has determined that this sub-element is Compliant.

Compliance Status: Compliant

3.3 Management of Change

Expectations: The company shall have an established, implemented and effective process for identifying and managing any change that could affect safety, security or protection of the environment, including any new hazard or risk, any change in a design, specification, standard or procedure and any change in the company’s organizational structure or the legal requirements applicable to the company.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(i), 40, 47, 48

Finding:

At the time of the audit, TransCanada identified that it had developed and implemented two separate Management Of Change (MOC) processes to manage and document changes that affect its PA Program. The first process was developed and implemented as part of its Integrity Management Program, and is captured in the Management of Change form (Integrity MOC). This Integrity MOC is asset based and therefore is triggered by changes to equipment or software. Changes are described and tracked using a standardized form that documents both description of the rationale for the change being managed, as well as internal and external stakeholder notifications that need to be considered under its process. Document review confirmed that the PA Program has utilized the Integrity MOC form to document a proposed change to the software used by the PA Program. This form does include space to provide rationales for the change being considered as well as internal and external stakeholder notifications that need to be considered as part of the proposed change.

The second process used to manage changes in its protection programs leverages some of the functionality of the TransCanada Operating Procedures (TOPs) database and the TOPs Framework Process. The PA Manual is considered a TOP and as such, is managed through the TOPs framework. The TOPs database contains the operating procedures and some related documents for each of the protection programs. Each year, the PA Program is subject to a review process. Once revisions have been made, the document is loaded into the TOPs database. The TOPs database automatically notifies a list of pre-identified internal stakeholders of the new version of the document in order to solicit comments on the changes. Another built in feature is the management of feedback. The TOPs database then requires that all comments are responded to by the TOPs owners. The TOPs database stores these comments and feedback and a permanent record is maintained. Each month the TOPs database automatically generates a report of all of the TOPs that have been modified during the previous month. TransCanada staff stated that any change that would affect their programs would be part of the annual TOPs review.

TransCanada staff indicated that these two processes ensure that changes to procedures are managed and communicated throughout its organization.

Upon review, the Board determined that as the Pipeline Integrity MOC process is reserved for asset based changes, it is too narrow in scope to manage PA-related changes, as required by the OPR. As the TOPs framework is intended to manage versions of operational and procedural documents exclusively, it is also too narrow in scope to meet the requirements of an MOC as outlined in the OPR. Also, the Board notes that neither of these processes include steps to proactively identify change that could affect safety, security or the protection of the environment. The Board has determined that by using the Integrity MOC and TOPs framework processes, TransCanada has operationalized some aspects necessary for an MOC process by documenting and communicating some types of change through document versioning, however, these processes are not adequate either separately or in combination to satisfy the OPR requirements.

In considering the MOC process as it integrates the HS&E management system, during the audit, TransCanada staff indicated that, while the company considers its presently implemented MOC processes to be compliant with the Board’s requirements, it has a project underway to implement a singular MOC process which will better meet the Board’s requirements. The new MOC is scheduled to be fully implemented by the end 2014. TransCanada staff provided an overview presentation of the new MOC. Initial review indicates that it could potentially address the OPR requirements.

During interviews TransCanada indicated that the company has developed the new MOC as the result of a corrective action arising from an internal audit completed in 2009. While the Board acknowledges the improvements that the new process represents, the Board notes that that the 2014 implementation date represents approximately 5 years from identification through to correction. The Board has addressed this issue in its evaluation of sub-elements 4.3 Internal Audits and 5.1 Management Review.

While TransCanada has implemented some aspects of an MOC, at the time of the audit, TransCanada did not demonstrate that it has established and implemented a process for identifying and managing change that could affect safety, security or protection of the environment, including new hazards or risks, changes in design, specifications, standards or procedures, and change in the company’s organizational structure or applicable legal requirements. As a result, the Board has determined that this sub-element is Non-Compliant.

The Board notes that the corrective actions implemented by TransCanada to address findings in sub-elements 2.1 and 2.2 will trigger the updating of the MOC discussed in this sub-element.

Compliance Status: Non-Compliant

3.4 Training, Competence and Evaluation

Expectations: The company shall have an established, implemented and effective process for developing competency requirements and training programs that provide employees and other persons working with or on behalf of the company with the training that will enable them to perform their duties in a manner that is safe, ensures the security of the pipeline and protects the environment.

The company shall have an established, implemented and effective process for verifying that employees and other persons working with or on behalf of the company are trained and competent, and for supervising them to ensure that they perform their duties in a manner that is safe, ensures the security of the pipeline and protects the environment. The company shall have an established, implemented and effective process for making employees and other persons working with or on behalf of the company aware of their responsibilities in relation to the processes and procedures required by the management system or the company’s protection programs.

The company shall have an established, implemented and effective process for generating and managing training documents and records.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(j),(k),(l),(p), 40, 47, 48

Finding:

TransCanada assigns, tracks and manages the training for staff involved in PA by utilizing the Learning Management System (LMS). Through the LMS, staff is notified when they are due to take or refresh training. In order to ensure that training is current and monitored, managers are also notified if any of their staff’s training has expired. The training program for the PA staff is described in each employee’s role profile.

One of the tools that TransCanada uses in order to identify and monitor required training is a Behavioural Competency Library to identify and inventory competencies such as analytical thinking and judgment. The library also outlines the behaviours that employees would need to exhibit to demonstrate their desired level of competency. In addition, each employee has a role profile for their position which is created with their supervisor based on a template that includes standardized Functional Competencies and Behavioural Competencies that are further divided into levels. The Behavioural Competency Library includes a section listing the skills and behaviours that would demonstrate empathy and relationship building as well as conflict resolution. Also "conflict resolution" is listed among the functional competencies in the Role Profile Mapping Template. It is not clear whether these competencies are mandatory training for all employees who may be working in the PA Program. According to staff, the Public Awareness representatives from across the system also receive training on current issues at the annual workshop.

In order to supplement its PA staff during construction projects or to conduct landowner visits, TransCanada hires contractors. These contractors report to the Regional Director and are managed through the TransCanada Contractor Safety Management Program. Aside from a script provided to contract PA staff in Quebec, TransCanada did not indicate that it provides its PA contractors with procedures related to the content of the PA visits.

Document review and interviews revealed a gap exists in the training program when it comes to this group’s interaction with the public and the possibility of hostility from an external party. The audit found that there was no training provided to the PA staff or procedures given to its contractors that outlined TransCanada’s expectations for events where staff are met with hostility. While the Board acknowledges that TransCanada has a Violence in the Workplace Policy in place as required by the Canada Labour Code, Part II, there was no documentation or staff interview that confirmed that this policy was reflected in the training program or that staff understood its application in the case of violence from a third party.

Even though TransCanada has established training for the PA Program, it did not indicate that it provides its staff or contractors with procedures for reporting and addressing events or potential issues of hostility from the public while in the performance of awareness-related duties. These staff and contractors could encounter a hostile third party while conducting a follow-up visit for a reported unauthorized activity. At the time of the audit, TransCanada did provide a Corporate Security briefing as well as a Security Awareness presentation that addressed personal safety and identifying aggressive behaviour. However, field staff and contractors interviewed did not indicate that they were aware of any procedure for identifying or addressing aggressive behavior or that this Security briefing was part of the training program. During interviews, field staff indicated that they were unaware of any documented procedure or company-approved response they were to follow should they encounter hostility from external parties while conducting awareness-related activities. Also, TransCanada did not demonstrate that staff or contractors who conduct PA activities are expected to follow the hazard identification process when it comes to working with third parties.

While TransCanada was able to demonstrate that it has developed and implemented a process for identifying, tracking and managing training, the audit found that its suite of training is incomplete for staff and contractors involved in awareness activities. The audit determined that the current training program does not include TransCanada’s expectations for identification, reporting and conduct if its employees and contractors should encounter hostility from third parties while conducting awareness activities. Due to the fact that the training program does not include training for all potential hazards associated with the PA Program, the training program does not meet the Board’s requirements. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

3.5 Communication

Expectations: The company shall have an established, implemented and effective process for the internal and external communication of information relating to safety, security and environmental protection. The process should include procedures for communication with the public, company employees, contractors, regulatory agencies and emergency responders.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(m), 40, 47, 48

Finding:

TransCanada’s PA Program provides the framework for the external communications plan. TransCanada has developed a schedule for contacting its stakeholders based on the timing schedule outlined by the American Petroleum Institute Recommended Practice 1162: Public Awareness Programs for Pipeline Operators. The PA Manual outlines the expectations for contact with the various stakeholder groups and these timelines are reflected in the regional plans. According to the PA Manual, the affected public is to be contacted every 2 years with an information package containing the baseline messages. Local public officials are to be contacted once every three years through the distribution of an awareness package and emergency officials are to be contacted once a year with awareness material. Excavators and contractors known to exist in the areas of the pipelines are to be contacted once a year with the baseline messages. Additional awareness sessions are available on request. Interviews confirmed that there are also calendars, containing safety messages, mailed out to all landowners in December of each year. TransCanada’s PA Program also identifies and includes contact with and the provision of awareness and safety material to Métis and Aboriginal Communities affected by the presence of its facilities. Contact with these groups is also tracked as part of the Regional Awareness Plans.

Another aspect of external communication between TransCanada and its landowners occurs at times of regular Operations and Maintenance work (O&M) consisting of a letter sent to the landowner from the Land Analyst on the maintenance project. This letter outlines the dates the project is projected to take place, the precise location of the work as well as the equipment that will be used. In order to leverage common audiences and common safety messages, TransCanada participates in the Canadian Common Ground Alliance as well as its regional partners in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. In Quebec, TransCanada also works with other Quebec pipelines with the Comité des Pipelines. As a member of these associations, TransCanada sends representatives from the PA group to related trade shows and awareness workshops in areas where it has facilities. Document review showed that each regional representative tracks the PA activities attended in the regional detailed awareness plan. Also, at the time of the audit, TransCanada had posted information for safe work around its facilities on its external website along with contact information for the one-call centres where it operates.

Internally, the PA Program communicates to its stakeholders through the Intranet as well as during project group meetings. According to PA staff, there are regular communications occurring with related programs such as Stakeholder Relations and the Lands Group. Also, the TransCanada PA Manager has established quarterly and annual reporting to Senior Management and the PA Steering Committee to provide updates on the PA activities, status reports on major initiatives and discussion of unauthorized activities.

TransCanada was able to demonstrate that it has established an external communication plan that identifies the appropriate stakeholders and developed messages relating to maintaining the safety and security of the pipeline and protection of the environment. The company was also able to demonstrate that it has established an internal communication plan to ensure that relevant safety information is communicated to internal stakeholders. Based on the information provided during the audit, the Board did not identify any non-compliance with TransCanada’s process relating to external and internal communication requirements. As a result, the Board finds TransCanada to be Compliant for this sub-element.

Compliance Status: Compliant

3.6 Documentation and Document Control

Expectations: The company shall have an established, implemented and effective process for identifying the documents required for the company to meet its obligations to conduct activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment. The documents shall include all of the processes and procedures required as part of the company’s management system.

The company shall have an established, implemented and effective process for preparing, reviewing, revising and controlling documents, including a process for obtaining approval of the documents by the appropriate authority. The documentation should be reviewed and revised at regular and planned intervals.

Documents shall be revised where changes are required as a result of legal requirements. Documents should be revised immediately where changes may result in significant negative consequences.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(i),(n),(o), 6.5(3), 40, 47, 48

Finding:

In order to manage and control its over-two hundred procedures and the related operational documentation, TransCanada has developed and implemented the TransCanada Operations Procedures (TOPs) Program. The TOPs Program Owner is the Vice President of Engineering and Asset Reliability. TransCanada has outlined the TOPs Program in a Framework Document. According to the Framework Document, "the objective of the TransCanada TOPs Program is to create a framework for the development and maintenance of the documentation necessary for TransCanada employees and contractors to efficiently and correctly conduct the operational and maintenance activities associated with TransCanada’s facilities". Also the Framework document clarifies that, "the TOP Program applies to all TransCanada TOPs when being created, revised, reviewed or retired."

The TOPs Framework document also provides the description of the roles and responsibilities for the hierarchy of responsibility from the TOP Program Manager, the TOP Contact, the TOP Manager as well as the reviewers. The Framework document also outlines the parameters for the development, maintenance, and access to operational procedures and related templates and work instructions which are called task packages.

TransCanada has developed and implemented a database to house the TOPs documents. Available to staff at all locations through the corporate intranet, the TOPs database has the functionality to generate a monthly report to track and alert internal stakeholders to any updates to TOPs and produces a monthly report listing the TOPs that were updated within the month.

As the main TOP for the PA Program, the PA Program Manual describes the process that is used to develop, test, review, revise and control the awareness material that TransCanada produces and distributes to its external stakeholders. For the PA Program, the most current version of the PA Manual and templates such as those used for the development of the regional plans were accessible and available at the time of the audit. Interviews with Head office and field staff confirmed that PA staff are aware that the most current versions of the procedures and templates are accessible through the TOPs database. At the time of the audit, the PA Program related documents were also accessible on the corporate intranet as a PA Program toolkit.

Based on the information provided during the audit, the Board did not identify any non-compliances with TransCanada’s process relating to establishing and implementing effective processes for identifying and managing documents required to meet the Board’s requirements. As a result, the Board views these processes as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

4.0 CHECKING AND CORRECTIVE ACTION

4.1 Inspection, Measurement and Monitoring

Expectations: The company shall have an established, implemented and effective process for inspecting and monitoring the company’s activities and facilities to evaluate the adequacy and effectiveness of the protection programs and for taking corrective and preventive actions if deficiencies are identified. The evaluation shall include compliance with legal requirements.

The company shall have an established, implemented and effective process for evaluating the adequacy and effectiveness of the company’s management system, and for monitoring, measuring and documenting the company’s performance in meeting its obligations to perform its activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment.

The company shall have an established, maintained and effective data management system for monitoring and analyzing the trends in hazards, incidents and near-misses. The company shall have documentation and records resulting from the inspection and monitoring activities for its programs.

The company management system shall ensure coordination between its protection programs, and the company should integrate the results of its inspection and monitoring activities with other data in its hazard identification and analysis, risk assessments, performance measures and annual management reviews, to ensure continual improvement in meeting the company’s obligations for safety, security and protection of the environment.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(g),(s),(u),(v), 40, 47, 48

Finding:

The Board expects companies to have an effective process for inspecting and monitoring its activities and facilities to evaluate the adequacy and effectiveness of its PA program and for taking corrective and preventive actions if deficiencies are identified. Subsequently, the Board expects companies to exercise this process on a regular basis and maintain records of their results in accordance with regulatory requirements.

According to the PA Manual, TransCanada performs an annual assessment of the PA Program that consists of three components:

1. Measuring Program Implementation: TransCanada measures the PA Program’s implementation using internal markers such as regional performance reports and success meeting set PA Program objectives.
2. Measuring Program Effectiveness: TransCanada measures the effectiveness of its external messaging with information obtained from outside the PA program itself including:
   • reported unauthorized activities in the Issue and Incident Tracking (IIT) database by region;
   • an assessment of public perception of TransCanada obtained from the External Communications group; and
   • results of the phone survey conducted by a third party, and business reply cards are evaluated in order to assess the understandability of the message.
3. Program Changes & Continuous Improvements: Following the annual assessment, suggested improvements are reviewed and evaluated for incorporation into the following year’s plan.

The PA Program Manager is responsible for coordinating the assessment of the PA Program with the regional representatives as well as with the PA Steering Committee. Besides the annual assessments, the PA Program is also reviewed 4 times a year. Each quarter, the PA Team in Calgary prepares a report from the IIT database based on the unauthorized activity data submitted by each region. These reports are sent out to the regions and they include:

• a breakdown of the types of unauthorized activities that have been reported in each region;
• a breakdown of the unauthorized activities by severity for each region;
• the breakdown of unauthorized activities for that region by month;
• a breakdown of IITs related to unauthorized activities that have been reported to TransCanada, by month, since 2009;
• the number of calls placed to One-Call in Canada by month; and
• the number of calls placed to the regional one-call centre (where such a service exists).

These graphs allow the Regional PA Coordinators to compare their region’s statistics with the rest of TransCanada as a whole. The graphs also illustrate the types of unauthorized activities that are being reported in order to promote the identification of prevalent hazards in each region. According to staff, they can use these reports to look for trends in unauthorized activities and design the regional PA Program in response to those trends.

For their part in the measuring and monitoring of the PA Program, each regional PA Team member also prepares a detailed report each quarter that describes the activities that have taken place in the region such as number of trade shows attended or landowners contacted. These reports are compiled at Head Office. The PA Program Manager provides the PA Steering Committee with quarterly updates. These updates include the number of reported unauthorized activities per region as well as updates on the various PA initiatives such as the calendar mail-outs and number of one-calls registered in a particular region. This information forms part of the scorecards that are rolled up for review by Senior Executive Management and are reflected in the overall corporate objectives.

Document review and interviews confirmed that staff at all levels of the PA Program were aware of the methods to track and report on the PA Program related activities and how that information is used to develop the PA Program for the following year. TransCanada was able to demonstrate that it uses several methods to monitor and measure the performance of its PA Program.

Based on the information provided during the audit, the Board did not identify any non-compliances with TransCanada’s process relating to establishing and implementing effective processes for inspecting and monitoring its activities and facilities and for evaluating the adequacy and effectiveness of its PA program. As a result, the Board views these processes as being Compliant in meeting its expectations for this sub-element.

The Board notes that the corrective actions for sub-element 2.1 and 2.2 of this audit may affect the processes described in this sub-element.

Compliance Status: Compliant

4.2 Investigating and Reporting Incidents and Near-misses

Expectations: The company shall have an established, implemented and effective process for reporting on hazards, potential hazards, incidents and near-misses, and for taking corrective and preventive actions. This should include conducting investigations where required or where hazards, potential hazards, incidents and near-misses have or could have resulted in the safety and security of the public, company employees and the pipeline, and protection of property and the environment, being significantly compromised.

The company shall have an established, maintained and effective data management system for monitoring and analyzing the trends in hazards, incidents and near-misses.

The company should integrate the results of its reporting on hazards, potential hazards, incidents and near-misses with other data in hazard identification and analysis, risk assessments, performance measures and annual management reviews, to ensure continual improvement in meeting the company’s obligations for safety, security and protection of the environment.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(r),(s),(u),(w),(x), 40, 47, 48, 52

Finding:

TransCanada has implemented the Incident and Issue Management program in order to track, document, analyze, communicate and report hazards, near-misses, and injuries. This audit examined the Incident and Issue Management process, its intended function within the overall HS&E Management System as well as how it is communicated to employees and how it identifies trends. According to the procedure, the Incident and Issue Management Program is buttressed by tools and procedures designed to promote the reporting, tracking, resolution, communication, and sharing of learnings for events that caused loss or had the potential to cause loss or injury. According to the classification guide, an issue is an event or possible opportunity which has the potential to generate a business improvement and /or has the potential to have an undesirable consequence and requires investigation and resolution. Events such as injury and illness, spill or release, unauthorized activities and inspection and audit findings are managed by the Incident and Issue Management program.

TransCanada uses its Incident and Issue Tracking (IIT) database company-wide as the tool for employees to report, track, communicate and analyze all near misses both internal and external for each of its protection programs. The IIT database is available to all employees through the TransCanada Intranet. To ensure that reports, called "IITs", are communicated by email to the appropriate people throughout the organization, staff can subscribe to the category of IITs that are relevant to their position. When an event that meets the criteria of being an issue or an incident occurs, the employee enters all known information; the system then automatically notifies the pre-determined list of internal stakeholders. For example, the PA Program staff, HS&E Senior Management and related areas such as the Lands Department receive all of the IITs regarding unauthorized activity by third parties. Managers and Directors can assign the resolution of certain IITs to staff using IIT and the database will notify the employees and their managers if the actions are past due for resolution. With each new IIT entry, the database creates a file where it stores documents related to the event such as regulatory reports and follow up investigations.

In order to promote consistent reporting and classification of events entered into IIT across its system, TransCanada developed the Incident Classification Guide. Site visits and interviews confirmed that the Incident Classification related materials were available at the sites and known to staff.

Interviews confirmed that staff involved in PA does not typically have a role with unauthorized activity follow-up until the annual analysis of unauthorized activities for trending and analysis purpose unless the third party requests an awareness session. For the PA Program, this information is analyzed for inclusion into the quarterly and annual reports as well as trend analysis and possible incorporation into the following year’s regional PA plan.

At the time of the audit, TransCanada did not provide sufficient access to IIT records required to evaluate if the process has been adequately and effectively implemented for the PA Program. Without being able to verify the adequacy of the implementation of the process, the Board was not able to determine that TransCanada has demonstrated compliance. Therefore, in accordance with the Board’s audit process, a lack of demonstration on the company’s part results in a finding of Non-Compliance.

TransCanada was able to demonstrate that it has a process in place to identify, track, analyze and resolve issues and incidents through its Incident and Issue Management Program that is understood by staff. However, TransCanada did not provide an adequate sample of IIT records to determine the effectiveness of the implementation of the IIT program in regards to the PA Program. Given the information provided, the Board was unable to attest to the effectiveness of the process regarding the PA Program. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

4.3 Internal Audits

Expectations: The company shall have an established, implemented and effective quality assurance program for its management system and for each protection program, including a process for conducting regular inspections and audits and for taking corrective and preventive actions if deficiencies are identified. The audit process should identify and manage the training and competency requirements for staff carrying out the audits.

The company should integrate the results of its audits with other data in hazard identification and analysis, risk assessment, performance measures and annual management review, to ensure continual improvement in meeting the company’s obligations for safety, security and protection of the environment.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(w),(x) 40, 47, 48

Finding:

Review of documents and records provided by TransCanada demonstrated that it has established and implemented an audit process for its HS&E programs which is comprised of both internal and external audits. TransCanada’s quality assurance program is implemented using a multi-level approach that includes:

• Tier 1 - Conformance reviews;
• Tier 2 - Inspections: Planned inspections;
• Tier 3 - Internal system audits and targeted audits focused on maintenance and equipment suitability; and
• Tier 4 - External audits and assessments

The Board notes that the documents and records provided by TransCanada indicate that its audit program for its HS&E programs is presently being implemented at a frequency exceeding the requirements to audit on a maximum three-year interval. The audit also determined that TransCanada has established and implemented a process for developing and implementing corrective and preventive actions if deficiencies are identified during its audits. Findings from the Tier 1, Tier 2 and Tier 3 audits of the HS&E Programs are tracked through the IIT Process. This IIT Process utilizes its IIT database for assignment, tracking and closeout for findings that have associated corrective or preventive actions identified. Findings from the Tier 4 external third party audits, are discussed, prioritized and managed at the senior management level.

The NEB audit determined that TransCanada’s internal audit process for its HS&E programs, as well as the third party external audits have consisted entirely of an evaluation of conformance to its own internal requirements (and some international standards). While this type of audit is useful in determining the ongoing validity of company procedures and programs, they do not satisfy the Board’s requirements as they do not include an assessment of compliance of its programs to the legal requirements. Without an evaluation of compliance to its legal requirements, TransCanada has not established an audit program that can determine the adequacy and effectiveness of its management system. For a more detailed assessment of TransCanada’s quality assurance program, please refer to the NEB 2014 audits of TransCanada’s Safety Management Program, Environmental Management Program or Emergency Management Program in this series.

As part of the Pipeline Safety and Regulatory Compliance group, the PA Program has undergone several assessments of effectiveness including a phone survey conducted with six hundred landowners which covered topics such as brand recognition and awareness of the requirement to call before digging. In addition to the assessments of effectiveness, TransCanada staff explained that there is an annual review and revision of the PA Manual and material through the TOPs Program. These reviews are designed to confirm ongoing suitability of the process and the incorporation of any changes and therefore are not necessarily reviewing the adequacy and effectiveness of the implementation of the PA Program as a whole. Further, while this type of review can be useful in determining the ongoing validity of company procedures, they do not include an assessment of the program’s compliance to legal requirements.

Although TransCanada advised that its processes and programs are derived from legal requirements, TransCanada did not demonstrate a process for the monitoring and tracking of all legal requirements are integrated into its procedures that was effective to meet the Board’s expectations (See sub-element 2.2 of this Appendix). Without an evaluation of compliance to its legal requirements, TransCanada has not established an audit program that can determine the adequacy and effectiveness of its management system.

Although TransCanada has conducted assessments of effectiveness and conformance reviews of its PA Program, it has not scoped the PA Program into its audit process. Also, TransCanada does not have a process to audit the PA Program to its compliance with legal requirements. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

4.4 Records Management

Expectations: The company shall have an established, implemented and effective process for generating, retaining, and maintaining records that document the implementation of the management system and its protection programs, and for providing access to those who require them in the course of their duties.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(p), 40, 47, 48

Finding:

TransCanada has established a Business Information Management Program to manage the records that are generated in support of or in performance of its operational activities. The Records Classification System and Records Retention Schedule document has been developed to reflect regulatory and business information retention requirements. The Classification System also contains instructions to ensure the protection of personal information collected as part of business activities including information related to landowner issues and the Public Awareness Program.

For the PA Program, many of the records generated as part of the awareness activities and emergency responder training sessions are stored in the Activity Central database. According to the User Manual, Activity Central is an integrated approach to track stakeholder contact information, activities and documentation for public awareness matters. Activity Central has the functionality to produce reports which can be used to analyze information and trends. Records related to unauthorized activities are accessed and managed through the IIT database.

As the TransCanada PA Program relies heavily on reaching its stakeholders by mail, it uses several methods to obtain and maintain records of contact information for each group of stakeholders identified for the PA Program. In order to contact the affected public, TransCanada provides its maps to a third party contractor and purchases the contact list from Canada Post, based on the postal codes that are within the vicinity of its facilities. The landowner contact data is managed and maintained by the Land Services in the Activity Central databases. In provinces where the service is available, TransCanada identifies new landowners through the land title offices. Any time landowners are contacted for projects or maintenance work, the contact information is also verified at that time.

According to the instructions provided to the PA contractors in Quebec, they are to verify and correct the landowner information that is on file with the company. Once the visits are completed, they confirm or correct the contact information in the Qbyte database. Verification of the accuracy of the landowner information also takes place following the annual calendar mail-outs. Staff makes corrections to the contact information when the calendars are sent back "return to sender" or the new residents contact them to correct the addressee information.

Contact information for Emergency Responder agencies along TransCanada’s rights of way is managed in the Emergency Responder database by the Regional Community Relations Representatives. Annual contact with these agencies is done with a fax back form to confirm that TransCanada has the contact information on file. Agencies who fail to respond to the request are contacted by phone to ensure the information on file is correct. In order to conduct its annual mail-out to excavators/contractors that may perform work in the vicinity of its facilities, TransCanada purchases contact information based on businesses with the Standard Industrial Classification codes (SIC) from Canada Post.

Based on the information provided during the audit, the Board did not identify any non-compliance with TransCanada’s process relating to establishing and implementing effective processes for generating, retaining, and maintaining records that document the implementation of the management system and its protection programs and for providing access to those who require them. As a result, the Board views these processes as being Compliant in meeting its expectations for this sub-element.

Compliance Status: Compliant

5.0 Management Review

5.1 Management Review

Expectations: The company shall have an established, implemented and effective process for conducting an annual management review of the management system and each protection program and for ensuring continual improvement in meeting the company’s obligations to perform its activities in a manner that ensures the safety and security of the public, company employees and the pipeline, and protection of property and the environment. The management review should include a review of any decisions, actions and commitments which relate to the improvement of the management system and protection programs, and the company’s overall performance.

The company shall complete an annual report for the previous calendar year, signed by the accountable officer, that describes the performance of the company’s management system in meeting its obligations for safety, security and protection of the environment and the company’s achievement of its goals, objectives and targets during that year, as measured by the performance measures developed under the management system and any actions taken during that year to correct deficiencies identified by the quality assurance program. The company shall submit to the Board a statement, signed by the accountable officer, no later than April 30 of each year, indicating that it has completed its annual report.

References: PCR Part II section 4; OPR sections 6.1, 6.5(1)(w),(x), 6.6, 40, 47, 48

Finding:

Interviews with TransCanada staff and review of the supporting documentation and records provided by TransCanada indicated that the company undertakes a significant amount of work in the oversight of its Health, Safety and Environmental (HS&E) programs.

The Health, Safety and Environment Management System Framework (HS&E Framework) document describes the HS&E Governance Structure for TransCanada. An HS&E Committee of the Board is comprised of Directors that monitor practices and procedures to ensure compliance with legislation, conformity with policies, procedures and programs, and the prevention and mitigation of losses. The HS&E Committee of the Board of Directors also considers implementation and effectiveness of policies, procedures and programs and makes recommendations to the Board. The HS&E Committee meets monthly, validates HS&E performance and goals, and conducts a critical review of incidents and incident trends. The HS&E Management System Responsibility Matrix sets out responsibilities, accountabilities, consultation and information for the HS&E Management System for all employees. Annually, the HS&E committee sets goals and objectives, with overall key performance indicators to monitor progress through scorecards. The scorecards are based on a vast number of metrics. TransCanada provided records of the HS&E Committee meetings conducted on a monthly basis over the last two years. These records demonstrate the review of performance and incidents, and the assignment of actions.

TransCanada’s PA Program is reviewed throughout the year by the PA Steering Committee that is comprised of the Vice Presidents of the programs most closely associated with public safety, consultation and interaction. Quarterly reviews to the PA Steering Committee include a discussion to validate the roadmap and the strategic direction as well as the unauthorized activity statistics for that quarter and how it compares over time including the breakdown by activity type. The Committee is also provided updates of the current status of approved program initiatives and related projects in various communities. During this review, the Committee receives updates on the scorecards for the program to determine the program’s performance related to the Key Performance Areas.

As discussed in Element 4.1 of this report, TransCanada has established review process for the PA Program. Section 4.10.1 of the PA Manual describes the annual review, the program changes and continuous improvements including those in areas of "message type, content, delivery frequency, delivery method, coverage area and supplemental enhancements". It also describes the components of the assessment which include measuring program implementation, measuring program effectiveness and program changes and continuous improvements. TransCanada was also able to demonstrate that there is a process for the communication and reporting on aspects of the PA Program occurring throughout the year from the PA Program to internal stakeholders at all levels.

However, TransCanada did not demonstrate that there was adequate direction provided by senior management in the form of program assessment for the identification of continual improvement based on the assessment of near-misses and unauthorized activities. According to its process, there are monthly, quarterly and annual reports distributed to internal stakeholders including senior management that discuss PA Program initiatives and unauthorized activities. However, TransCanada did not demonstrate that there was a process for assessing or evaluating its own PA Program for the purpose of identifying any continual improvement initiatives based on learnings from these near-miss reports. Review of a sample of the monthly reports for the Wildrose and Rocky Mountain Regions indicate that the root cause analysis conducted contained conclusions such as "insufficient excavation practices" or "failure to contact one-call". While these issues are likely contributing factors to the unauthorized activities, the audit did not see any process whereby TransCanada examines its own response in order to identify potential areas for improving the program such as questioning the adequacy of its messages, methods or its chosen timing for the provision of awareness information to its external stakeholders based on the review of unauthorized activities. Records reviewed indicate that the majority of unauthorized activities occur in the spring and summer and yet the main PA Program awareness tool is a calendar that is mailed out to its stakeholders in December. The audit reviewed documentation of the ongoing implementation of the calendar initiative, but was not provided any information to suggest that it is effective.

In reviewing this sub-element, the Board also takes into consideration companies’ senior management involvement with those activities which it has a clear and direct responsibility as management representatives to prioritize for the company. Specifically these include evaluating and managing the results of: internal inspection and monitoring programs; investigations of incidents; audits; and the results of compliance verification activities conducted by regulatory agencies.

As noted above, TransCanada’s senior management and Board of Directors are significantly involved in the direction and review of the company’s HS&E related management system programs and Protection Programs, including the PA Program. This audit, however, has made findings that could be partly attributed to management review and action requirements. These include findings relating to the development of the scope of company audits, the evaluation of audit findings and recommendations and the development and implementation Corrective Action Plans to address some of the deficiencies identified by the audits.

While the Board was able to confirm that TransCanada is undertaking several management review activities consistent with the descriptions included in the HS&E Framework document, it was not able to review a documented and comprehensive process of the PA Program that described activities for adequately and effectively undertaking its management reviews to ensure continual improvement as described in the Board’s expectations. As a result, the Board has determined that this sub-element is Non-Compliant.

Compliance Status: Non-Compliant

[i] The "References" in this table contain specific examples of the legal requirements applicable to each element but are not exhaustive and do not represent a complete list of all applicable legal requirements audited to, which are found within the NEB Act and its associated regulations, as well as other applicable legislation, technical and other standards including the Canada Labour Code and CSA Z662, and any conditions contained within applicable certificates or orders enforced by the Board.

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

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