environment, health and safety mangement_systems

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Environment,health and safetymanagement

systems

OperationsBest PracticeSeries

2010

www.ipieca.org


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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: [email protected] 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 theprior 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.


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Environment,health and safety

managementsystemsIPIECA 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 1

What is an EHS management system 1

Understanding EHS management systems 1

Where do EHS management systems fit in thehierarchy of managing EHS issues? 2

How is a management system installed

and executed? 4

Assigning and measuring accountability 4

Assigning accountability 4

Measuring accountability 4

Performing a gap analysis 5

Prioritizing the gaps and developingclosure plans 5

Implementing a management system 5

Measurement and verification 6

System status measures 6

System effectiveness measures 6

Appendix 1: Sample template elements 7

Elements and expectations 7

Element 1: Policy and leadership 7

Element 2: Continuous improvement 7

Element 3: Safety and health 7

Element 4: Risk management 8

Element 5: Incident reporting and investigation 8

Element 6: Crisis preparedness 9

Element 7: Environmental protection 9

Element 8: Product stewardship 9

Element 9: Training 9

Element 10: Community relations 10

Element 11: Legal requirements 10

Appendix 2: Definitions 11


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1

ENVIRONMENT, HEALTH AND SAFETY MANAGEMENT SYSTEMS

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 theoperational 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.

What is an EHS management system?

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.

Introduction

Understanding EHS management systems

Well-designed and executed EHS management

systems can help to prevent major incidents,

improve reliability, reduce operating costs andpreserve 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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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 betterunderstanding 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 Plan-

Implement-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.

Measuring: identifying the key performance

indicators (KPIs), and setting up the required

audit and review processes.

Adjusting: reviewing EHS results and findings,

and adjusting accordingly

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

compliance, health and safety management, etc.,

Where do EHS management systems fit in the hierarchyof managing EHS issues?

incidentrates

time

hardware

management systems

culture and behaviour

Figure 1 Historical development of environmental performance management


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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

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:

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.

Verification and measurement:A system must bechecked to see whether it is functioning as

designed and is achieving its stated purpose.

There are two components:

Verification determines that processes and

procedures are functioning and being

effectively executed;

Measurementconfirms 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.

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 verificationand measurement activities, to enhance system

suitability, capability and effectiveness.

Figure 2 The Plan-Implement-Check-Adjust cycle for

continuous improvement in environmental, health and

safety performance

MEASUREKPIs Standards

IMPLEMENT

leaders

hip

polic

y

com

mitm

ent

PLAN

reso

urces organization

ADJUST

au

di

t

rev

iew

INDIVIDUAL

SYSTEMS

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

OVERA

LLEHSMS FRAMEWORK

OVERALLEHSMS FRAMEWO

RK

In the outside

systems,

management drives

the entire

management

systems processes;

the inside systemsare individual

management

systems such as

permit to work,

environmental

compliance, health

and safety

management, etc.


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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.

How is a management system installed and executed?

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:

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 personsharing 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,

somebodywill be held accountable for every

action.

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 (whereaccountability 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.

Assigning and measuring accountability


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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.

Performing a gap analysis

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 beenprioritized, closure plans can be developed to close

them.

Implementing a management system

Implementation can be split into two parts:

1. Installation: accountable people ensure that any

procedures and other documentation needed toclose 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.

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.

Prioritizing the gaps and developing closure plans


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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) andsupportive 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.

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 simplenumeric 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

System effectiveness measures

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.

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(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.

Measurement and verification


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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 business-

specific 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 EHSperformance.

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 thepartnerships approach to EHS is acceptable.

1.10 A system is in place to periodically review the

EHS performance of partnershipsincluding

joint ventures (JVs), and facilities operated by

others (OBOs).

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.

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.

2.2 Measurable EHS objectives are established

annually and used to drive continuous

improvement.

2.3 Procedures are in place to encourage the

transfer of good EHS systems, programmes,

practices and technology.

2.4 Systems are in place to review andincorporate improvements to EHS

management systems.

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.

Appendix 1: Sample template elements


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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.

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 safeoperating condition.

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.

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.

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.

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 EHSperformance is considered in selection of

contractors, vendors and service providers,

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.

4.1 A system is in place to identify EHS hazardsand their potential consequences.

4.2 A system is in place to assess and prioritize

risks and manage them in a cost-effective

manner.

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.

Element 5: Incident reporting andinvestigation

Effective incident investigation, reporting and follow-

up provides the opportunity to learn and to improve

performance.

5.1 A system is in place for reporting EHS

incidents, including near misses.

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.


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5.4 Lessons learned from incident investigations

are shared with appropriate audiences.

Element 6: Crisis preparedness

Preparedness and planning for emergencies

ensures that all necessary actions are taken if an

incident occurs.

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.

Element 7: Environmental protection

Reducing the impact of operations on the

environment is a priority. Management and

minimization of environmental risks and liabili ties

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 hazardouswaste is documented.

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.

7.4 A system is in place to prevent spills, leaks,

and major loss of containment.

7.5 A system is in place to manage risks and

known instances of soil or groundwater

contamination resulting from facilityoperations.

7.6 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.

8.1 A system is in place to ensure that the

product safety aspects of new and

reformulated products are evaluated prior to

commercialization.

8.2 A system exists to ensure that product safetyinformation is accurate and available to

employees, customers and the public.

Element 9: Training

Safe, environmentally sound operations rely on well-

trained 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 skillsand 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 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.

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 andcommunicate 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.


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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.

Policies: an articulation of company EHS

aspirations. They provide direction to line

management on implementation, and define the

boundaries of acceptable performance.

Practice: the method used to accomplish a specific

task. Many practices are not documented and do

not require a procedure (see below).

Procedure: a written description of how a specific

task should be accomplished.

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.

Appendix 2: Definitions


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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

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 Refiningand Distribution (CONCAWE)

European Petroleum Industry Association(EUROPIA)

International Association of Oil & GasProducers (OGP)

Petroleum Association of Japan (PAJ)

Regional Association of Oil and Natural GasCompanies in Latin America and theCaribbean (ARPEL)

South African Petroleum Industry Association(SAPIA)

World Petroleum Council (WPC)

Association members

IPIECA

5th Floor, 209215 Blackfriars Road, London SE1 8NL, United Kingdom

Telephone: +44 (0)20 7633 2388 Facsimile: +44 (0)20 7633 2389

E-mail: [email protected] Internet: www.ipieca.org

IPIECA 2010 All rights reserved. www.ipieca.org

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