EI Process Safety Management Framework EI Process Safety Survey

Industry Good Practice for Process Safety Management

Martin W. Ball

John W. Pond

EIPSS Ltd.May 2012

The Apex of the Pyramid

www.energyinst.org/PSM-frameworkwww.eipss.com

Agenda

• Energy Institute

• EI Process Safety Management Framework (EIPSMF)

• EI Process Safety Survey (EIPSS)

Who ?

• The leading chartered professional membership body supporting individuals & organisations across the energy industry.– 13,500 individual members– 300 company members– Across 100 countries

• Professional Recognition• Sustains personal career development (training & accreditation)• Information & Guidance

– Technical work programme– Publications

• Networking– Branch structure

Context

Buncefield Jaipur

Texas City Deepwater Horizon

Process Safety Management Key to Managing Operational Risk

Escalating Consequences

• Increased scrutiny by regulators and governments

• Investor Confidence undermined

Deepwater Horizon

Flixborough

Bophal

Piper Alpha

Exxon Valdez

Texas City

• Escalating Consequences of Incidents • Individuals called to account

in public

IndustryChallenge

NetIncome

Income ExpenditureFeed

SelectionPlan

OperationSet-up

OperationFacility

AvailabilityMaint’ce

CostEnergy

UseCats &

ChemsLoss People O/head

HSEComplianceOperational

Integrity

Investment Personnel Development

• Integrity of operation• Maximise Income• Minimise Costs• Effective Capital Investment• Effective People & Organisation

• Integrity of operation• Maximise Income• Minimise Costs• Effective Capital Investment• Effective People & Organisation

Don’t Hurt AnyoneDon’t Harm Environment

x % ROCE

How we Achieve it

“Flawless” Operation“Flawless” OperationWhat we need

to Achieve

PSM in Context

NetIncome

Income ExpenditureFeed

SelectionPlan

OperationSet-up

OperationFacility

AvailabilityMaint’ce

CostEnergy

UseCats &

ChemsLoss People O/head

HSEComplianceOperational

Integrity

Investment Personnel Development

Don’t Hurt AnyoneDon’t Harm Environment

x % ROCE

“Flawless” Operation“Flawless” Operation

PSM Framework needs to enable us to answer two key questions … … with confidence

1. How will we assure the integrity of the operation?2. How will we know …. we are doing it ?

What we need

to Achieve

How we Achieve

Need to know?

‘How likely am I to have an incident-free day tomorrow?’

The two key questions– How will we do that?– How will we know we are doing it?

 

“I think” means “I don't know”

EIPSMF Development

• Initial meetings of EI Process Safety Committee discussed committee scope and ‘process safety’ scope: – Lack of clarity within and between companies as to scope of process safety.– Identified benefit in promoting a common high-level framework for PSM across all

sectors of the energy industry.– Proposals to develop PSM framework in EI technical work programme received

high level of support.

• Development approach:– Workshops with participants representing a cross-section of the energy industry

sectors and stakeholders, including industrial insurers, UK HSE, etc.– Subsequent wider stakeholder review. – Developed by the industry for the industry.

The need

• Workshop participants supported the need for PSM framework:– Provide a vision for PSM.– Define a model for and raise profile of PSM within their

organisations.– Define what needs to be in place to maintain ‘licence to operate”.– Help to define roles, responsibilities & accountabilities for PSM.– Easy to understand how to achieve suitable PSM.– Provide a basis for assessment, benchmarking and verification.

PSM Framework Structure

• Focus Areas – 4 High level key components ofthe Framework.

Increasing Detail

• Elements – 20 key aspects of the operation we need to manage appropriately

in order to assure the integrity of the operation.

• Expectations – 202 things we should be doing in order to assure the integrity of

the operation.

• Guidelines – How to meet the ExpectationsGood Practices + PI’s (PSPI’s)

PSM Framework “Focus Areas”

RiskIdentification &

Assessment

RiskManagement

Review&

Improvement

AssuredOperational

Integrity

Process Safety

Leadership

PSM Framework “Elements”

01. Leadership Commitment & Responsibility

02. Identification & Compliance with Legislation & Industry Standards

03. Employee Selection, Placement and Competency and Health Assurance

04. Workforce Involvement

05. Communication with Stakeholders

06. Hazard Identification & Risk Assessment

07. Documentation, Records & Knowledge Management

08. Operating Manuals & Procedures09. Process and Operational Status Monitoring, and Handover10. Management of Operational Interfaces

11. Standards & Practices

12. Management of Change & Project Management13. Operational Readiness & Process Start - up

14. Emergency Preparedness

15. Inspection & Maintenance

16. Management of Safety Critical Devices

17. Work Control , Permit to Work & Task Risk Management

18. Contractor & Supplier Selection & Mg’t19. Incident Reporting & Investigation

20, Audit, Assurance and Management Review & Intervention

PSM Framework Expectations

Element 16 Management of safety critical devices• An essential requirement for HS&E and process safety is that safety critical equipment and

devices (SCDs) are in service and operating correctly. • Management must ensure that safety critical equipment and devices are identified and

appropriately managed, so that they are in service and functioning correctly.

16.1 SCDs are uniquely identified on an asset register which provides up-to-date asset lists and equipment records, including location and equipment specification data. The asset register provides a basis for the planning of SCD testing, inspection and maintenance.

16.2 SCD testing, inspection and maintenance programmes are in place. There are defined standards and the programmes are proportionate to the risk associated with failure of the SCDs.

16.3 There are procedures to ensure that SCD testing, inspection and maintenance programmes are reviewed regularly commensurate with risk, using findings from the programme, industry experience and incidents to identify and address issues and opportunities for improvement, so that they are kept up to date as living systems.

16.4 Etc.

PSM Framework status/testimonials

• Published December 2010 • >500 downloads in >40 Countries by January 2012

• ‘I am impressed with this document…. I seek to use some information in Element 7 Documentation, records and knowledge management’

Upstream Operations, QGC (BG), Australia • ‘A fine piece of work indeed & well worth all the effort I feel. There are several elements

where we are seeking to develop strategies to meet the expectations.

E.ON Central Networks, UK• ‘…. The value of this guidance … is that it sets out a clear framework on which to develop

and implement a process safety management system and from which effective 'on the ground' control measures can be derived and maintained.…’

Gordon Macdonald, Director - Hazardous Installations Directorate, UK HSE

EI PSMFApplication

Can be applied to:– Any region– Any industry sector

• Oil - E&P through to filling stations• Chemicals• Power – Generation through to distribution

Implementation– Doesn’t replace existing HS&EMS

provides a basis for:-• Gap analysis and optimisation• Benchmarking

EIPSMF

• EI Process Safety Management Framework developed with industry wide support.– Participants represented a cross-section of the energy industry sectors and

stakeholders, including industrial insurers, UK HSE, etc.– Subsequent wider stakeholder review.

• EIPSMF developed:

“For the industry by the industry”• EI Process Safety Management Framework represents:

– Current Energy Industry PSM good practices– Comprehensive– Structured– Endorsed by UK HSE

EIPSSEI Process Safety Survey

• Self-assessment  of compliance with Expectations of EIPSMF• Benchmarking against selectable internal peer groups• Benchmarking against selectable industry sector

and geographical peer groups

• Online service – launched in 2011• Real time information• Participants can join at any time

• Independent - Energy Institute• Anonymity assurance• Does not require EI Membership

EIPSS – Why?

• Enables senior executives and managers to :-– Have a clear and consistent understanding of compliance and

performance levels across their organisations on an absolute basis and relative to their peers.

– Identify areas of strength and weakness

– understand how likely they are to have

“an incident free day tomorrow”

– Have a sound basis for development of compliance / performance improvement plans

EIPSS – Why?

• Business Challenges– Aging assets – Margin pressure – M&A activity (seller & buyer side due diligence) – Changing regimes (maintenance, etc.)– Need to demonstrate compliance

• Benefits– Consistent, systematic approach against a recognised framework– Alleviate Fear Uncertainty & Doubt – Potential Cost of NOT acting

EIPSSApplicability

Can be applied to:-• Any region (geography)• Any industry sector

– Oil - E&P through to filling stations– Chemicals– Power – Generation through to distribution

Implementation/Application:-• EIPSS Agnostic to HS&EMS being used. • EIPSMF provides a consistent reference base line for :-

• Profiling Compliance – Identification of Strengths & Weaknesses• Gap Assessment & Development of Improvement Plans• Benchmarking

EIPSS Output

Process Safety Profile – graphical & intuitive

Absolutemeasurement

EIPSS Output

EIPSS – Survey statistics: Industry Segment & Geography selectable

EIPSS Output

Process Safety Profile Overlaid on Selected Peer Group Statistics

Profile is Absolute in respect to EIPSMFand Relative in respect to selected peer group

EIPSS Output

Tabular

• Overall rating• Position in peer group• Peer group quartile

boundaries

• Appropriate next level of detail

• Ratings for each Element or Expectation.

• Peer group quartile boundaries for next level of detail.

Process Safety Profile with drill-down to detail

Graphical

• Peer group “Overall rating” distribution curve.

• Appropriate next level of detail

• Ratings for each Element or Expectation overlaid on Peer group performance quartiles.

EIPSS Multi - Site

Reporting Group 0

Reporting Group 1

Site 1 Site 2

Reporting Group 2

Site 3 Site 4 Site 5

• Multi – site option provides increased reporting flexibility for larger and more complex organisations, providing capability to:-

– Benchmark internally. (Organisation or specific Division can be selected as Peer Groups)

– Benchmark overall Organisation or Specific Division against selected Peer Groups.

– “Drill down” to identify excellence & Issues.

EIPSS Multi-Site Output

• Graphical Report for Organisation or Selected Division shows range of performance and median for the group overlaid on statistics for selected Peer Group.

• Tabular reports & “drill downs” highlight high and low performing Divisions & Sites.

EIPSS Multi-Site Output

Tabular Reports display:-• Range of performance and median

for:-– Selected reporting group – Next level down in the organisation.

– Elements or Expectations (as appropriate) for selected reporting group.

– Peer group quartile boundaries

EIPSS Input

• Input easily managed by response to multiple choice questions

• Data entry privileges can be controlled by element.

EIPSMF & EIPSS

EI Process Safety Management Framework– Defines a model for effective Process Safety Management– Defines what needs to be in place in order to manage process safety risk– Developed by the industry for the industry– Endorsed by UK HSE

EI Process Safety Survey– Consistent, systematic assessment of compliance– Compliance benchmarking– Real time information

• Applicable to any major hazard installation• Applicable to all Safety Management Systems• Available to non members of the EI

EI Process Safety Management Framework EI Process Safety Survey

Industry Good Practice for Process Safety Management

Martin W. Ball

John W. Pond

EIPSS Ltd.May 2012

The Apex of the Pyramid

www.energyinst.org/PSM-frameworkwww.eipss.com