Environment, health and safety management systems

Operations Best Practice Series 2010

www.ipieca.org

The global oil and gas industry association for environmental and social issues
5th Floor, 209215 Blackfriars Road, London SE1 8NL, United Kingdom Telephone: +44 (0)20 7633 2388 Facsimile: +44 (0)20 7633 2389 E-mail: info@ipieca.org Internet: www.ipieca.org

IPIECA 2010 All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior consent of IPIECA. This publication is printed on paper manufactured from fibre obtained from sustainably grown softwood forests and bleached without any damage to the environment.

Environment, health and safety management systems

IPIECA Operations Best Practice Series

Cover photographs reproduced courtesy of the following (clockwise from top left): ExxonMobil; Nexen; Photodisc Inc.; iStockphoto; Corbis; Shutterstock.com.

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Contents
Introduction What is an EHS management system Understanding EHS management systems Where do EHS management systems fit in the hierarchy of managing EHS issues? How is a management system installed and executed? Assigning and measuring accountability Assigning accountability Measuring accountability Performing a gap analysis Prioritizing the gaps and developing closure plans Implementing a management system Measurement and verification System status measures System effectiveness measures Appendix 1: Sample template elements Elements and expectations
Element 1: Policy and leadership Element 2: Continuous improvement Element 3: Safety and health Element 4: Risk management Element 5: Incident reporting and investigation Element 6: Crisis preparedness Element 7: Environmental protection Element 8: Product stewardship Element 9: Training Element 10: Community relations Element 11: Legal requirements

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7 7 7 7 8 8 9 9 9 9 10 10

Appendix 2: Definitions

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ENVIRONMENT, HEALTH AND SAFETY MANAGEMENT SYSTEMS

Introduction
Each document in the IPIECA Operational, Fuels and Product Issues Committee (OFPIC) Best Practice series provides guidance on defining and achieving best practice in managing environmental aspects of operations in the downstream oil and gas industry. However, examples of best practice alone are not sufficient to drive improvements in operating performance; what is needed are management systems to accompany these best practices, hence, each document is also accompanied by a section giving management system information for the operational area in question. The objective of this document is to give a broad overview of the principles of environment, health and safety (EHS) management systems, as these principles are the foundation for the entire best practice series itself: without the concurrent adoption of these systems, the adoption of even the most sophisticated and leading-edge best practices are of little value. An EHS management system is a cyclical business process for systematically achieving a desired level of EHS performance. EHS management systems involve planning and implementing the necessary systems, programmes and procedures to achieve that level of performance, checking the results and making adjustments, as necessary, to ensure that the desired level of performance is being achieved. It may also be desirable to achieve external certification to an acknowledged management system standard (such as ISO 14001 for example) to provide external verification that the building blocks of an accepted management system are in place. Although this document is concerned primarily with the environmental management aspects of operations, reference is also made to EHS management systems. This is because environmental control is frequently managed as a subset of an overarching EHS management system.

What is an EHS management system?

Understanding EHS management systems

Well-designed and executed EHS management systems can help to prevent major incidents, improve reliability, reduce operating costs and preserve company reputation. An EHS management system not only defines management expectations for operational environmental management, but also:

establishes a process to clearly assign accountability for meeting those expectations; provides a common framework for linking together disparate systems that likely already exist in many operating units; and facilitates a culture of continuous performance improvement.

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Where do EHS management systems fit in the hierarchy of managing EHS issues?
The historical development of environmental management was characterized by early attempts to improve environmental performance focusing primarily on engineering measures. As programmes matured, it became evident that this was insufficient: even the best designed and built facility or system could suffer incidents occasioned by poor management or human error. Successive interventions therefore relied increasingly on management systems and, eventually, on a better understanding of human culture and behaviour (winning hearts and minds) to reduce incidents to a practicable minimum. Management systems vary, but nearly all are based on the Plan-Implement-Measure-Adjust cycle. To be successful, the individual elements of this cycle must be supported by leadership and commitment from the senior management of the enterprise. Appendix 1 (see page 7) suggests typical activities that might need to take place in a well-run operating entity in order to effectively and efficiently manage EHS concerns. It outlines the various elements and systems that corporate management typically expect their operating entities to have in place, together with their expectations of conduct and activities required to manage this area

effectively. Individual companies will of course have their own set of expectations, but the ones listed in Appendix 1 are relatively common. These expectations are grouped into broad categories called elements. The majority of expectations in the template start with the phrase, A system is in place to This phrase has a defined meaning within the context of an EHS management system. A system is simply a term to describe an organized process to plan activities, carry them out (implement them), measure how well they are carried out and adjust accordingly. Every system has a set of common characteristics. Typically, EHS management systems are a collection of many individual systems and practices that are managed together through an overall system framework. Both the individual systems and the overall system framework consist of the same PlanImplement-Measure-Adjust cycles, as shown in Figure 2 (opposite). Figure 2 shows that, in the outside systems, management drives the entire management systems process by: Planning: developing, identifying and prioritizing needs, and establishing objectives and targets. Implementing: applying the right resources, and demonstrating leadership, commitment and support, as well as ensuring that an appropriate organizational structure is in place.

Figure 1 Historical development of environmental performance management

hardware

Measuring: identifying the key performance indicators (KPIs), and setting up the required audit and review processes.

management systems incident rates culture and behaviour

Adjusting: reviewing EHS results and findings, and adjusting accordingly

The inside systems are the individual management systems, e.g. permit to work, environmental
time

compliance, health and safety management, etc.,

ENVIRONMENT, HEALTH AND SAFETY MANAGEMENT SYSTEMS

where the individual owners (to whom responsibility for managing the individual system has been assigned) need to ensure that their systems are in place and delivering results. It cannot be emphasized strongly enough that it is the combination of management commitment and participation, and employee awareness, involvement and buy-in that makes the overall

Figure 2 The Plan-Implement-Check-Adjust cycle for continuous improvement in environmental, health and safety performance
S L L E HS M F R A M E W O

OV

ER A

PL A N
s

RK

In the outside systems, management drives the entire management

hip policy c o ders m mi lea tm en

re s

o u rc e

o rg a n i z

a ti o

a u d it r evi e w

process function effectively. The above steps, depicted in Figure 2, apply to the management system cycle as a whole. The process is broadly similar for the individual programme elements and technical components of an EHS management system (shown within the large circle in Figure 2). While these may vary from company to company and facility to facility, each system area should be driven using the principles outlined above. However, to be effective, these individual systems should possess and be documented as possessing, the following five basic characteristics:

systems processes; the inside systems are individual management systems such as permit to work, environmental compliance, health and safety management, etc.

A DJ UST

INDIVIDUAL SYSTEMS

IM P L E M E N T

(e.g. permit to work, compliance, maintenance, etc.)

OV

K P Is
ERA

MEASURE

L L E H S M S F R A ME W

S t a n d a rd s

K OR

There are two components: Verification determines that processes and procedures are functioning and being effectively executed; Measurement confirms the quality of system processes and determines that system objectives and results are being achieved. Ongoing evaluation is essential to make sure that the expectations for the management system are being met. A management system should employ internal and external assessment processes to gauge the degree to which expectations are being satisfied. Such evaluations provide the information needed to further improve both performance and supportive management systems. Both process (status) measures and outcome (effectiveness) measures are required.

Scope and objectives: The scope defines the systems boundaries and identifies interfaces with other systems, organizations and facilities. Objectives clearly define the systems purpose and expected results.

Processes and procedures: Processes address the steps that describe what the system does and how it functions, whereas procedures address the key tasks required by a process.

Responsible and accountable resources: The resource characteristics determine how approvals are authorized, as well as the experience and training requirements that qualify people to carry out their roles and responsibilities. These should be specified for both implementation and execution of the management system.

Feedback and improvement mechanisms: These mechanisms help to ensure that actions are taken to continuously improve the system. They use findings from assessments, and from verification and measurement activities, to enhance system suitability, capability and effectiveness.
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Verification and measurement: A system must be checked to see whether it is functioning as designed and is achieving its stated purpose.

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How is a management system installed and executed?

Besides defining managements expectations, a management system establishes processes to install the system within business units and execute it to ensure continuous improvement. Suggested steps for implementing an EHS management system might be: 1. Assigning accountability. 2. Performing a gap analysis. 3. Planning/prioritizing the gaps. 4. Implementing the system. 5. Measuring and assessing the status and effectiveness reporting (to management) and adjusting the system to improve performance.

Assigning and measuring accountability

Assigning accountability
In an EHS management system there is, or should be, a concrete distinction between being held accountable and being responsible. The distinction can be made as follows:

Managing accountability
The first step in managing accountability is to devise a method to assign individual accountability for managing the stated expectations, at all levels of the business. Various methods are commonly employed. In some companies, a cascading process (where accountability is cascaded down an organizational hierarchy to the most appropriate level) is used. In others, system owners and administrators are centrally assigned for each system (the individual process inside the circle in Figure 2). A review of accountabilities should be carried out after any significant reorganization.

Accountable: The individual who has the authority to say Yes or No to the task and who has the power of veto over all others involved in the task. For any given task, only ONE person is held accountable!

Responsible: The individual(s) who actually perform the task(s) is(are) considered responsible for the action or implementation. The degree of responsibility is defined by the accountable person. There may be more than one person sharing responsibility for the action or implementation.

Clear assignment of responsibilityand accountabilityis a key factor in any management system. Without clear assignment, there will always be the danger that somebody else will be assumed to be responsible for an activity; as a result, it is quite possible that no one will be responsible. In a well-constructed EHS management system, somebody will be held accountable for every action.

ENVIRONMENT, HEALTH AND SAFETY MANAGEMENT SYSTEMS

Performing a gap analysis

The next step is to determine the current status of the organizations systems as compared to the expectations embedded in the EHS management system expectations. This step will identify the areas where additional work is needed. Operating entities that had EHS management systems in place before the adoption of a new EHS management system will not have to make significant changes to their systems, but may have to perform a gap analysis to ensure that their systems are consistent in content and format with the new management system. The initial gap analysis should, for example, include verification of the effectiveness of existing systems that have been identified as high priority issues by previous audits, if any.

Prioritizing the gaps and developing closure plans

Once the gaps have been identified, they will be ranked based on the risks they may pose. This prioritization usually takes place at both the facility level and at the group level to assure that the highest risk areas are being addressed first in each operating entity. Once the gaps have been prioritized, closure plans can be developed to close them. Note: Installation is a finite process that can be managed as a project with targets and milestones using tools such as a flowcharting or Gant charts.

Execution, however, is an ongoing programme of

continuous improvement that never ends.

Implementing a management system

Implementation can be split into two parts: 1. Installation: accountable people ensure that any procedures and other documentation needed to close gaps, including clearly defined roles and responsibilities, are developed. 2. Execution: accountable people ensure that: those who must carry out activities to help meet the expectation are appropriately trained; resources are allocated to ensure that the expectation is met throughout the business unit; and adequate communications are established.

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Measurement and verification

The individual management systems, as well as the process that drives them, need to be part of an ongoing process of evaluation. This is essential to make sure that the expectations in the management system (examples of which are given in Appendix 1) are being met. Both internal and external assessment processes should be used in order to gauge the degree to which the expectations are being satisfied. Such evaluations provide the information needed to further improve both performance (system status measures) and supportive management systems (process measures). The system status measurements address the question, Are we doing things right?, while the effectiveness measures address the question, Are we doing the right things?. Both types of measures are needed to measure the health of the system. They can be quantitative (e.g. measured on a numeric sliding scale) or simply qualitative. If desired, system status and effectiveness could both be appraised externally, e.g. as part of an ISO 14001 review, however given the relatively long period of time that typically elapses between external assessments, more frequent internal assessments would be desirable. The frequency of review for an individual management system is typically set by reviewing both past performance and the level of risk inherent in the operation to which the management system pertains. When conducting internal assessments, cross-facility or round robin assessments which incorporate staff These typically measure the extent of conformance to management system requirements and the integrity of associated documentation, as well as the quality of management system execution. Overall, these measures will gauge how well the system is working and whether the stated objectives are being achieved.

System effectiveness measures

System status measures

These measure the extent to which the five characteristics (see page 3) of a management system are built into the system design and are properly documented. They include an assessment of the extent of deployment, including communication, training and establishment of measurement, verification and feedback processes. At the very least, the coverage of the management system for each element should be evaluated; initially a simple numeric scale may be sufficient, e.g.: 1 = Process under development 2 = Process in place but not fully implemented or embedded 3 = Process in place and implemented; procedures documented and results being measured 4 = Process in place and supported by an ongoing improvement process

(e.g. operators) from other, similar facilities in a group (e.g. functionally similar but geographically and/or culturally remote) can provide significant value and learning for both assessed and assessing parties.

ENVIRONMENT, HEALTH AND SAFETY MANAGEMENT SYSTEMS

Appendix 1: Sample template elements

Elements and expectations
Element 1: Policy and leadership
Management provides the vision, establishes the framework, sets the expectations and provides the resources for the environmental management of operations. Leadership and visible commitment to improved EHS performance are critical elements in successful operations. 1.1 EHS policies are established, communicated and periodically updated. 1.2 Business units establish and implement EHS management systems that are consistent with the Corporate EHS management system. 1.3 Business units evaluate whether businessspecific EHS management system expectations are required. 1.4 A system is in place to define, document and assign EHS roles and responsibilities. 1.5 Management demonstrates leadership and promotes commitment to improving EHS performance through active and visible participation. 1.6. Employees and contractors are encouraged to be actively involved in improving EHS performance. 1.7 EHS performance indicators are established and monitored. 1.8 EHS costs are measured, understood and managed. 1.9 A system is in place to evaluate EHS performance and management systems of prospective partners to ensure that the partnerships approach to EHS is acceptable. 2.4 Systems are in place to review and incorporate improvements to EHS management systems. 2.3 Procedures are in place to encourage the transfer of good EHS systems, programmes, practices and technology. 2.2 Measurable EHS objectives are established annually and used to drive continuous improvement. 1.11 EHS performance is an integral part of individual and team performance and is included in the calculation of personal remuneration; outstanding contributions are recognized. 1.10 A system is in place to periodically review the EHS performance of partnershipsincluding joint ventures (JVs), and facilities operated by others (OBOs).

Element 2: Continuous improvement

Performance improves continually through a process that both measures performance relative to expectations, and promotes learning and sharing of best practices. 2.1 Systems are in place to ensure that operating entities periodically measure the level to which the requirements of the EHS management system are met.

Element 3: Safety and health

Protecting the safety and health of employees is recognized as a top priority. Employees and contractors adhere to established safe work practices, following up-to-date procedures to manage safety and health risks, and to effectively manage change.

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3.1

A system is in place to ensure that safe work practices, including off-site activities and capital project construction, are established, communicated, documented and enforced.

and that they maintain acceptable EHS performance.

Element 4: Risk management

Risks are identified, assessed, and managed. An established risk prioritization process reduces risk and mitigates hazards to employees, contractors, vendors, the community and the environment.

3.2

A system is in place to self-assess the adequacy and enforcement of the facilitys safe work practices.

3.3

A system is in place to maintain facilities, vehicles and equipment to ensure their safe operating condition. 4.1 A system is in place to identify EHS hazards and their potential consequences. 4.2 A system is in place to assess and prioritize risks and manage them in a cost-effective manner.

3.4

Purchasing and warehousing procedures and contracts include EHS requirements.

3.5

A system is in place to ensure that safety and environmental control equipment and systems are tested and maintained. 4.3 A system is in place to review the design of new and modified facilities to ensure incorporation of appropriate EHS protection measures. 4.4 Risks associated with the acquisition, closure and divestment of facilities and operations are assessed and managed.

3.6

A system is in place to ensure that the EHS implications of temporary or permanent changes in operation and/or facilities are properly managed.

3.7

A system is in place to ensure that design data, drawings and operating procedures are documented, updated, communicated and accessible.

Element 5: Incident reporting and investigation

Effective incident investigation, reporting and followup provides the opportunity to learn and to improve performance. 5.1 A system is in place for reporting EHS incidents, including near misses.

3.8

A system is in place to ensure that employees and contractors are fit for duty and are not compromised by external influences including alcohol and drugs.

3.9

A system is in place to identify, assess and manage occupational health risks. 5.2 A system is in place to ensure that incidents are investigated to determine root causes, and corrective actions necessary to prevent their recurrence. 5.3 A system is in place to select corrective action and track implementation to completion.

3.10 A system is in place to ensure adequate communication to employees and contractors of the hazards associated with jobs. 3.11 A system is in place to ensure that EHS performance is considered in selection of contractors, vendors and service providers,
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5.4

Lessons learned from incident investigations are shared with appropriate audiences.

7.3

A system is in place to ensure that the control of emissions and the minimization of waste are evaluated in the design and modification of facilities.

Element 6: Crisis preparedness

Preparedness and planning for emergencies ensures that all necessary actions are taken if an incident occurs.
7.5 6.1 A system is in place to identify potential crisis scenarios and their impacts. 6.2 A system is in place to ensure that up-to-date emergency response and crisis management plans exist at each level of the company. 6.3 Equipment, facilities and trained personnel needed to respond to emergencies are defined and readily available. 6.4 Regular training exercises and drills are conducted to ensure readiness for emergency action. 6.5 The relative roles, responsibilities and capabilities of the company and government emergency response agencies are understood and incorporated into emergency response plans. 8.1 7.6 7.4

A system is in place to prevent spills, leaks, and major loss of containment. A system is in place to manage risks and known instances of soil or groundwater contamination resulting from facility operations. Efficient use of energy and natural resources are a key consideration in business planning, as well as designing, developing and improving products and processes.

Element 8: Product stewardship

The hazards associated with products made and used by the operational entity, and the consequential risks posed throughout the products life are effectively assessed and managed. Product safety information is accurately communicated. A system is in place to ensure that the product safety aspects of new and reformulated products are evaluated prior to commercialization.

Element 7: Environmental protection

Reducing the impact of operations on the environment is a priority. Management and minimization of environmental risks and liabilities are an integral aspect of operations. 7.1 A system is in place to monitor and reduce emissions, waste and the environmental impact of business. 7.2 A system is in place to provide for the safe disposal of waste; disposal of hazardous waste is documented.

8.2

A system exists to ensure that product safety information is accurate and available to employees, customers and the public.

Element 9: Training
Safe, environmentally sound operations rely on welltrained people. Employees and contractors are aware of their EHS responsibilities and are trained to fulfill them. 9.1 A system is in place to ensure that EHS skills and knowledge are defined and documented by job.
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9.2

A system is in place to provide training to perform jobs in a safe and environmentally responsible manner.

Element 11: Legal requirements

Compliance with regulatory requirements and company guidelines are periodically measured and verified as part of the continuous improvement process. 11.1 A system is in place to ensure compliance with all applicable legal requirements. 11.2 Systems are in place to monitor and communicate emerging EHS issues and legal requirements and communicate their impact throughout the company. 11.3 A system is in place to participate, as appropriate, in the formulation of EHS laws, regulations and standards.

Element 10: Community relations

Open and honest communication with the communities in which the company operates builds confidence and trust in the integrity of the company and its operations. 10.1 Channels of communication with the local community are established and fostered where appropriate. 10.2 Community concerns are identified and addressed. 10.3 Contact is established and maintained with environmental, health and safety authorities. 10.4 Significant changes in operations are communicated to the community early to ensure that the changes do not become a source of concern.

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Appendix 2: Definitions
Element: a grouping of expectations into a key EHS focus area (e.g. policy and leadership, safety and health, risk management). Expectations: business conduct necessary to achieve a desired level of EHS performance. Each expectation has an assigned owner. Gap: a gap is said to exist when an expectation is not being fully met. Legal requirements: laws, regulations, ordinances, etc. adopted by governments to control the environmental, health and safety performance of facilities, operations, and products marketed by the company. Management system: a cyclical business process for systematically achieving a desired level of performance. Management systems involve planning and implementing the necessary systems, programmes and procedures to achieve that level of performance, checking on results and making adjustments, as necessary, to ensure that the desired level of performance is being achieved. Peer assessment: a periodic review of an expectation owners activities, carried out by a trained co-worker to provide an independent opinion of the status of each expectation. Self-Assessment: a check by a unit or facility to determine how well its programmes and procedures satisfy legal requirements and conform to the expectations of the EHS management system. System: a management tool for meeting an established objective made up of four steps: plan, implement, measure and adjust. Its objectives and scope are defined, responsibilities are assigned, and procedures are in place, all with documentation. Adequate resources and training are provided. Progress is periodically measured, objectives are adjusted and results are reviewed with management. Throughout the process, there is adequate communication among those involved. Procedure: a written description of how a specific task should be accomplished. Practice: the method used to accomplish a specific task. Many practices are not documented and do not require a procedure (see below). Policies: an articulation of company EHS aspirations. They provide direction to line management on implementation, and define the boundaries of acceptable performance.

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IPIECA is the global oil and gas industry association for environmental and social issues. It develops, shares and promotes good practices and knowledge to help the industry improve its environmental and social performance; and is the industrys principal channel of communication with the United Nations. Through its member led working groups and executive leadership, IPIECA brings together the collective expertise of oil and gas companies and associations. Its unique position within the industry enables its members to respond effectively to key environmental and social issues.

Company members BG Group BP Chevron CNOOC ConocoPhillips Eni ExxonMobil Hess Hunt Oil KPC Mrsk Marathon Nexen NOC Libya Occidental OMV Petrobras Petronas Petrotrin PTT EP Qatargas RasGas Repsol YPF Saudi Aramco Shell SNH StatoilHydro Talisman Total Woodside Energy

Association members African Refiners Association (ARA) American Petroleum Institute (API) Australian Institute of Petroleum (AIP) Canadian Association of Petroleum Producers (CAPP) Canadian Petroleum Products Institute (CPPI) The Oil Companies European Association for Environment, Health and Safety in Refining and Distribution (CONCAWE) European Petroleum Industry Association (EUROPIA) International Association of Oil & Gas Producers (OGP) Petroleum Association of Japan (PAJ) Regional Association of Oil and Natural Gas Companies in Latin America and the Caribbean (ARPEL) South African Petroleum Industry Association (SAPIA) World Petroleum Council (WPC)

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IPIECA 2010 All rights reserved.

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