comprehensive compliance - nimonik · did not understand applicable canadian rail operating rules...

Comprehensive Compliance

By Nimonik

Tame the compliance beast

Why?Standards and regulations are (often) born of disaster. Disasters should not happen.

https://www.youtube.com/watch?v=XTopVi1hVVM

AgendaNon-compliance risks

Compliance challenges

How to achieve comprehensive compliance

Q/A

01

02

03

04

05

Case study - Lac Megantic

Non-compliance risks

Non-compliance risks5 risks

Risks of non-compliance

Accidents

Penalties

Reputation damage

Product delays and

market access

Regulated out of

business

Penalties

https://www.epa.gov/enforcement/enforcement-annual-results-numbers-glance-fiscal-year-2017

When non-compliance happens

• 2015, Los Angeles, “The Safety Manager was sentenced to three years of probation and will face fines and penalties of about $19,000 after pleading guilty to a single felony count of violating a workplace safety rule that caused a death.” – The Guardian

• 2016, Iowa, a business owner was sentenced to 24 months incarceration. He was also sentenced to three years supervised release following his imprisonment. He is required to pay $789,138.03 in restitution for knowingly storing hazardous waste without a permit. - EPA

• 2017, Ontario, “At least 11 employers sentenced to jail for safety violations in Ontario, figures show” –CBC

Penalties

Source: EPA 2018 report

Reputational damage

Source: X. D. Xu et al

Reputational damage

Source: X. D. Xu et al

CAR - Cumulative Abnormal Return

Reputational damage

Source: X. D. Xu et al

Market access/Product delays

• German automotive parts company supplier shutdown in China

• 200 car models and 49 makers affected

Regulated out of Business

• “186. An inspector may order the suspension of work or the complete or partial shutdown of a workplace and, if necessary, affix seals, if he considers a worker’s health, safety or physical well-being to be endangered.” – Act respecting occupational health and safety, Quebec

• “China Shuts Down Tens Of Thousands Of Factories In Widespread Pollution Crackdown” – Oct. 2017, Forbes.com

Role of compliance

• From lagging to leading• From reactive to proactive• EHS Strategy

Comprehensive EHS Compliance

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EHS Excellence

Benefits of compliance

• Motivate workforce to take action• Reduce risk of penalties• Get ahead of new and

changing regulations• Lower risks

New requirementsISO 14001:2015 and ISO 45001:2018

Source: ISO 14001:2015

New requirementsISO 14001:2015 and ISO 45001:2018

Source: ISO 14001:2015

New requirementsISO 14001:2015 and ISO 45001:2018

Source: ISO 14001:2015

Compliance challenges

Compliance challenges

• Unsustainable programs

• Reduced workforce

• Increasing demand

• Poor processes

• Sporadic improvement

• Poor resources/knowledge

• Lack of support/attention from other departments

How to achieve comprehensive compliance

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-compliance

and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Step 1

1. Fully understand

1)The organization 2)Its context3)Its scope4)Risks and opportunities5)Environmental aspects

1. Search, evaluate applicability, and classify

Identify your applicable regulations, codes and standards

Step 1

• Jurisdictions – International, Federal, Provincial/State, Municipal,… (include key industry and customers’ requirements if necessary)

• Legislation Statuses: Proposed – Published – In Force – Repealed

• Document Type: Acts & Laws, Regulations, Guidance, Standards, Notice, order & directive

• Source:

Identify your applicable regulations, codes and standards

Source: CFR, EPA,OSHA, MINSA websites, consultants

Step 1

Tool - Excel

Identify your applicable regulations, codes and standards

Step 1

Tool – Software

Identify your applicable regulations, codes and standards

Source: NimonikApp

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-

compliance and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Step 2Select requirements that apply to you

• Identify each applicable requirement within a legislation

• An example: Regulation of Health & Safety• In total: 338 clauses• No specific department is responsible

for the whole regulation• Specific clauses need to be assigned to

appropriate team/expert

Step 2

Tool - ExcelSelect requirements that apply to you

Step 2

Tool - Software

Source: NimonikApp

Select requirements that apply to you

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-compliance

and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Step 3Implement a process with your subject matter experts

• Start with reports and work backwards• Map to organizational structure• Clear accountability

• Compliance is never the sole responsibility of EHS team

• Compliance must be cultural

Step 3

Tool - Software

Source: NimonikApp

Implement a process with your subject matter experts

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-compliance

and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Step 4Document your compliance actions

• Procedures & Processes:• Compliance management procedures• Compliance required procedures

• Records:• Internal and external communication• Implementation outcome evidence

• Permits & License:• National Pollutant Discharge Elimination

System (NPDES) Permit

Policy

Manual

Procedures

Work instructions/SOPS

Records and forms

Why?

Who when where?

How?

Evidence

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-

compliance and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Step 5Monitor for changes to your requirements

California bills passed in 2018

Periodical review key websites

RSS from official websites

Newsletters from consulting companies

Source: BillTrack50

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-

compliance and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Step 6Verify compliance with audits and management reviews

Audit (Internal & External)

• Preparation (compliance obligations, process, evidence, evaluation outcomes, key CO elements

• Output (finding reports on activity & outcome, )

• Tips: (find the CO for each audit finding)

Compliance Management Evaluation

• When? (Real-time, periodical, internal or external changes)

• What aspects? • your capability (culture,

systems, people) to be in compliance,

• the effectiveness of your compliance programs to reduce risk,

• the advancement of compliance outcomes.*

• How? (Leading indicators and lagging indicators)

Management Review

• Preparation (summary of changes, gaps, proposals, SWOT)

• Output (records of compliance status, action plans, risk assessment, annual EHS OTP (objective, target, planning))

Source: Lean compliance

Tier 3Challenges to safety systems3

Tier 4Operating discipline & management system

performance indicators4

Tier 1LOPC events of greater consequence

1

Tier 2LOPC events of greater

consequence2

Source: ANSI/API RP 754 [4]

Leading indicators

Lagging indicators

Step 6Verify compliance with audits and management reviews

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-

compliance and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Step 7

• Define Corrective and Preventive Action Plan (CPAP) with responsible expert

• Ensure the documentation of correction process and result

• Effectiveness assessment

Take action on non-compliance and opportunities for improvement

Step 7

Recommend to use a system to track all the findings:

• No delay - notify higher level supervisor directly

• No miss – status summary of all findings

• Full records –communication, correction result

• Key for due diligence

Take action on non-compliance and opportunities for improvement

7 steps for comprehensive compliance

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

Plan

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-compliance

and opportunities for improvement

Do

Check

Act

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

Case studyLac Meg antic

July 6th, 2013

Lac Megantic overview

• July 6, 2013• US based MMA Railway train carrying

crude oil derailed in Lac Megantic• 47 deaths and 6 million litres oil spill • Penalties of 1M and ongoing lawsuits• 6 ex-MMA employees pled guilty to

violating the Railway Safety Act.

MMA compliance background

● Poor safety culture at MMA● Always on Transport Canada’s inspection list● Recurring audit findings● Safety management system in writing not in

action● Inadequate corrective actions - eg lead

automotive engine failure repaired with epoxy

Source: Transport Safety Board of Canada

Events leading to Lac Megantic● Cars with outdated design, carrying highly

explosive oil● The lead locomotive with parts repaired with epoxy

started to fail, but was ignored ● Applies air and hand brakes when rules require only

hand brakes● 7 hand brakes instead of 9● Tests hand brakes with air brakes applied● Leaves the train unattended - no company policy● No company procedure on the smoky engine ● Defective lead locomotive catches fire● Firefighters turn off the locomotive fuel supply● MMA sends a foreman who releases firefighters

and leaves ● With the locomotive off, air brakes fail, hand brakes

are not sufficient, train rolls down, derails and explores, killing 47

Source: Transport Safety Board of Canada

Step 1Identify your applicable regulations, codes and standards

Poor identification - eg frequent Transport Canada’s audit findings

Step 2 Select requirements that apply to you Did not understand applicable Canadian Rail Operating rules - eg handbrakes

Step 3 Implement a process with your subject matter experts Experts not involved - eg highly explosive materials in outdated cars

Step 4 Document your compliance actions Improper documentation - eg fire dept turned off engine

Step 5 Monitor for changes to your requirements Improper monitoring - eg warnings issued about Class 111 cars

Step 6 Verify compliance with audits and management reviews Poor safety culture and MS as is evident from Transport Canada’s findings

Step 7Take action on non-compliance and opportunities for improvement

Poor safety culture - lead locomotive fixed with epoxy

How MMA failed in the 7 steps of comprehensive compliance

7 steps and the Swiss Cheese model on how accidents happen

Accident trajectory

Losses

Organizational InfluencesStep 1 and 2

Unsafe SupervisionStep 3,4,5

Preconditions for Unsafe actsStep 6 and 7 Unsafe Acts

Step 3

● Identify your applicable regulations, codes and standards

● Select requirements that apply to you

● Implement a process with your subject matter experts

● Document your compliance actions

● Monitor for changes to your requirements

● Verify compliance with audits and management reviews

● Take action on non-compliance and opportunities for improvement

● Implement a process with your subject management reviews

Take away

• Compliance is the foundation for EHS management

• Be proactive, not reactive

• Setup a thorough and continuous improving compliance system

We improve the world by helping companies respect environmental, health, safety & quality requirements.

Established 2008

Our officesMontreal Shanghai

+1-888-608-7511info@nimonik.comnimonik.com

Our Services and products

Software

EHS regulatory tracking

Audit protocolsEHS database

NimonikApp Mobile Auditing app

EHS Regulatory Content

How Nimonik can help in these 7 steps

2Select requirements that apply

to you

3Implement a process with your

subject matter experts

4Document your compliance

actions

5Monitor for changes to your

requirements

7Take action on non-

compliance and opportunities for improvement

1Identify your applicable

regulations, codes and standards

6Verify compliance with audits and

management reviews

ContinuousImprovement

● Mobile Auditing● NimonikApp● Audit protocols

● EHS database

● EHS database ● NimonikApp

● NimonikApp● NimonikApp● EHS regulatory tracking

● Mobile Auditing● NimonikApp

Plan

Do

Check

Act

Questions?Thank you.

nimonik.com

+1-888-608-7511info@nimonik.com