ARCHIVED - Approval of Proposed Corrective Action Plan for Enbridge Pipelines Inc. and its Board-Regulated Subsidiaries – 2015 National Energy Board Onshore Pipeline Regulations Audits
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File OF-Surv-OpAud-E101-2014-2015 03
28 April 2016
Mr. Guy Jarvis
President, Liquids Pipelines
Accountable Office under the National Energy Board ActFootnote 1
Enbridge Pipelines Inc.
3000 Fifth Avenue Place
425 -1st Street S.W.
Calgary, AB T2P 3L8
Dear Mr. Jarvis:
Approval of Proposed Corrective Action Plan (CAP) for
Enbridge Pipelines Inc. (Enbridge) and its Board-Regulated Subsidiaries’
2015 National Energy Board Onshore Pipeline Regulations, (OPR) Audits
The National Energy Board (NEB or Board) has examined Enbridge’s CAP submitted by letter dated 30 April 2015 in response to the findings identified in the Board’s final OPR Audit Report for the Integrity Management, Safety Management, Emergency Management, Third Party Crossings and Public Awareness Programs Final Audit Reports.
The Board has reviewed Enbridge’s proposed CAP as documented and approves them subject to the additional direction in the attached Table.
The Board notes the length of time between submission and approval of Enbridge’s CAP and acknowledges that Enbridge has indicated to Board staff during ongoing interactions that it has already implemented many of the proposed commitments as part of its responsible management practices in anticipation of the Board’s approval. While the Board’s assessment of Enbridge’s proposed CAP has not resulted in significant or numerous changes to the CAP, the Board recognizes that the timing and content of this approval may cause Enbridge to have to adjust its development and implementation schedules. The Board, therefore, directs Enbridge to file any updated development and implementation schedules confirming or adjusting the CAP completion dates, as necessary by 29 May 2016 for Board approval.
Enbridge shall file with the NEB quarterly CAP implementation updates beginning 30 June 2016. The information filed should verify that corrective actions and schedules implemented address the findings identified in the Final Report and the directions in the attached Table. The Board will determine whether the individual corrective actions are adequately and effectively implemented during future compliance activities. The Board may also, in specific circumstances, determine that a site visit is necessary. In that case, Enbridge will be contacted to arrange a mutually agreeable time.
The Board’s Final Audit Reports made Non-Compliant Findings against legal requirements described in the National Energy Board Act (NEB Act) and associated Regulations, Certificates and Orders and, where appropriate, the Canada Labour CodeFootnote 2 (CLC) and referenced standards. Accordingly, CAP closure will be based on the Board’s assessment of the outcomes of Enbridge’s corrective actions and as measured against the CAP taking into consideration legal requirements, applicable CLC requirements and the audit report documentation.
The Board also notes that, to be compliant with the OPR, companies must establish and implement the required management system practices and processes as part of their management system and each required program listed in section 55 of the OPR. Therefore, Enbridge must demonstrate the applicability and implementation of the required management system practices and processes included in its CAP as per OPR section 6.5 to be evaluated as Compliant.
The Board notes that Enbridge has attributed some of the Audit Report Findings and regulatory expectations and interpretations to the Board’s audit staff. For clarity, all audit reports and information contained therein represent the findings and interpretations of the Board and should be considered and addressed as such.
If you require any further information or clarification, please contact Tim Sullivan, Lead Auditor, at 403-801-1289 or toll-free at 1-800-899-1265.
Original signed by
Secretary of the Board
Attachment 1: Corrective Action Plan - Additional Direction Table
Enbridge Pipelines Inc. – 2015 NEB Management System Audits
|Reference No.||Enbridge Corrective Action Plan Reference||Additional Board Direction|
|1.||CAP 2.2 MS-1 – Master Compliance Registry||
The Board notes that Enbridge has not included a specific commitment to ensure that its CAP also includes establishment and implementation of a process for monitoring compliance as required by OPR 6.5(1) (g).
The Board directs that Enbridge establish and implement this process as part of its CAP.
|2.||CAP 3.1 MS-1 – Operational Activities||
The Board has assessed Enbridge’s proposed CAP and has not identified any significant concerns with the approach or schedule. The Board, however, notes that Enbridge’s commitment is limited to developing a process “to link significant processes together to ensure operational activities of employees and contractors are coordinated and controlled”. The Board is concerned that the processes contemplated to be linked within the proposed CAP include processes identified as deficient. The Board’s audit reports identified that Enbridge’s processes did not meet the requirements of OPR section 6.5 (1) (k) and (q). The Board is of the opinion that linking the previously identified deficient processes will not result in a compliant process as proposed. While Enbridge may be considering the establishment of compliant processes within its overall CAP, the Board did not identify specific commitments to do so.
The Board, therefore, directs Enbridge to ensure that, as part of its CAP, it establishes and implements processes in accordance with OPR paragraphs 6.5 (1)(k) and (q).
|3.||CAP 3.4 MS-1 – Training and Competency||
The Board has considered Enbridge’s proposed CAP and has identified no concerns with the approach or schedule with the exception of the milestone commitment “Implementation of the Workforce Competency and Qualification Process to align with existing stakeholders processes with safety critical positions”. In its CAP, Enbridge limits wording to “safety critical” activities. The Board is of the opinion that environmental protection activities should also be included.
Enbridge is therefore directed to add “environmental protection” critical tasks wherever safety critical is mentioned within this CAP item and implement the necessitated changes as per the proposed schedule.
The Board is also concerned that Enbridge may be limiting its interpretation of “safety critical” to occupational health and safety considerations. The Board reminds Enbridge that it considers safety of the public within the definition of safety in its requirements.
Enbridge is therefore directed to ensure that its CAP accounts for this safety definition.
|4.||CAP 3.5 MS-1 – Communications||
The Board finds that this CAP is inadequate as proposed.
Enbridge has committed to developing “a management system level internal and external communication process that aligns with existing internal and external communication processes.” The Board notes that its final audit reports indicated that in addition to Enbridge’s corporate processes being inadequate the practices being utilized within the programs were not all identified to be adequate to meet the Board’s requirements or implemented as required by Enbridge’s existing processes and practices. Therefore, the Board is of the opinion that the CAP as proposed, cannot result in compliant communication processes being established and implemented as they align with deficient processes. Enbridge is directed to re-develop its CAP for this sub-element to ensure that its processes meet the Board’s management system and program requirements as identified in the Final Audit Reports and submit it for approval by 29 May 2016.
|5.||CAP 4.3 MS-1 Internal Audits||
The Board approves this CAP with respect to development of its Quality Assurance (QA) Program; however, the Board reminds Enbridge that, to be compliant, the CAP developed should not be limited to a re-development and re-organization of existing activities but must also include consideration of standard QA principles and program requirements such as, for example, management and leadership responsibilities and activities, QA objectives, targets and performance measures and QA activities outside of normal technical program checks.
With respect to Enbridge’s CAP commitment regarding Corrective and Preventive Action processes, the Board notes that Enbridge has limited its references to the Emergency Management and Environmental Protection Programs Final Audit Reports when it is also identified as a deficiency in the Integrity Management and Safety Management Programs Final Audit Reports.
Enbridge is directed to ensure that its CAP for this sub-element also mitigates those program findings as well.
|6.||CAP 1.2 EMP-1 – Policy, Emergency Management||
The Board approves Enbridge’s CAP but notes that, in its CAP, Enbridge states that “the regulations do not explicitly require an Emergency Management Policy”.
The Board notes that the OPR 6.3(1) specifically requires that companies shall establish documented policies and goals for meeting its obligations under section 6. The Board notes that section 6 obligations specifically include the safety and security of the public and the company’s employees and the protection of the environment and property throughout the asset lifecycle which would logically include addressing incidents or emergencies. Further, the OPRs indicate that the company must base its management system and programs referred to in OPR section 55 (Emergency Management programs are specifically referred to under section 55 (a)) on the policies established under section 6.3. Additionally the OPRs indicate that management systems must be “explicit” in their design and documentation. Based on these requirements, the Board has determined that Enbridge must have explicit EM programs policies and goals to be compliant and ensure that they meet their safety and environmental protection obligations.
|7.||CAP 2.1 MS-1 Hazard, Risk Evaluation and Control (EM Program specific additional review)||
The Board approves the CAP but notes that Enbridge’s CAP, as documented, does not clearly and specifically account for the deficiencies identified in the EM Program Final Audit Report with respect to this sub-element to assure the Board that the identified deficiencies will be addressed.
The EM Program Final Audit Report identified that Enbridge “must demonstrate a documented process that specifically includes direct links between its hazards and evaluations of risk to the determination of the types, approach and development of these controls”.
Enbridge is directed to ensure that its CAP explicitly addresses these requirements.
|8.||CAP 2.4 EMP-1 – Human Resource Need for Incidents||
The Board notes that Enbridge has committed to developing and documenting “an annual process that evaluates human resource needs required to respond in an emergency and as part of emergency planning. This process will ensure that Enbridge can demonstrate its human resources are sufficient for a hypothetical high consequence scenario.”
The Board notes that Enbridge’s proposed CAP is limited to identifying human resource needs and availability based on one scenario per region based on a risk based methodology.
The Board notes that its Final Audit Report identified that any company must be able to demonstrate “the sufficiency of its human resources to meet its obligations to ensure the safety of the public, its employees and the pipeline; and ensure the protection of property and the environment in a documented manner” during an incident. It is the Board’s opinion that Enbridge’s proposed CAP may not address the Board’s finding as it limits itself to one scenario versus a fulsome review of the potential human resource requirements from the perspective of both numbers and skill sets based on a plausible range of scenarios.
The Board finds that this CAP is inadequate as proposed.
The Board directs Enbridge to submit a CAP for approval that addresses the Board’s Non-Compliant findings by 29 May 2016.
|9.||CAP 2.2 PAP-1 – PAP Effectiveness ( This review and comment is applicable to both Public Awareness and Third-Party Crossings Programs)||
The Board approves the CAP but reminds Enbridge that any process developed and implemented needs to ensure that third-parties are communicated with appropriately with respect to legal requirements as identified in the report.
|10.||CAP 1.2 MS-1 – Policy, Integrated Management System||
The Board approves Enbridge’s CAP but states that, “the regulations do not explicitly require an Integrity Management Policy”
The Board notes that the OPR 6.3(1) specifically requires that companies must establish documented policies and goals for meeting its obligations under section 6. The Board notes that section 6 obligations specifically include the safety and security of the public and the pipeline throughout the asset lifecycle which would, in the Board’s view, include addressing incidents or emergencies. Further, the OPR’s indicate that the company must base its management system and programs referred to in OPR section 55 (Emergency Management programs are specifically referred to under section 55 (b)) on the policies established under section 6.3. Additionally the OPRs indicate that compliant management systems must be explicit in their design and documentation. Based on these requirements, the Board has determined that Enbridge and other companies must have explicit IM programs policies and goals to be compliant and ensure that they meet their safety obligations.
|11.||CAP 2.1 IMP-1 – H2S Hazard||
The Board finds that this CAP is inadequate as proposed.
The Board notes that CSA Z662, 2015 version, has now been released. This version indicates that a company must develop and implement a program to monitor (i.e. test) the H2S in its crude because it constitutes a potential hazard to the pipeline. CSA Z662-15, Clause 16.1.2 defines the levels of H2S that are considered to be “sour service”. Clause 16.2.1 (a) (ii) defines this as less than 425 ppm dissolved H2S as determined by the ASTM UOP163 test method. Therefore, the 2015 version is specific as to the concentration of H2S as well as specific as to the test method.
The Board directs Enbridge to submit a CAP for approval that addresses the Board’s Non-Compliant finding and the requirements of CSA Z662-15 by 29 May 2016.
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