UNIT 2

REGULATORY REGIME

Since petroleum industry is hazardous industry, a number of regulations have been framed by various statutory/regulatory authorities in the country to safeguard the interest of workers, public and environment.

REGULATORY/ STATUTORY AGENCIES:

The list of various regulatory/statutory agencies having jurisdiction over the petroleum industry are:

Central Pollution Control Board ( CPCB) under the Ministry of Environment and Forests

Respective State Pollution Control Board (SPCB)under the Ministry of Environment and of the State

Oil Industry Safety Directorate (OISD) Under the MoPNG

Chief Controller of Factories (CIF) of The Respective State Under The Ministry Of Labor.

Chief Inspector of Boilers (CIB) of the respective State under the Ministry of Labour

Chief Controller Of Explosives (CCE) , Ministry of Heavy Industry, Dept of Explosives.

Chief Electrical Inspector (CEI) of the respective state under the Ministry of Power.

Director General of Civil Aviation ( DGCA) under The Ministry of Civil Aviation, National Air Port Authority Of India.

Tariff Advisory Committee (TAC) Under the Association of Insurance Companies

Bhaba Atomic Energy Commission (BARC) Under Ministry of Atomic Energy

Director General of Mines and Safety (DGMS) under the Ministry of Mines

Regional Transport Authority (RTA) under the Ministry of Surface Transport

Director General Of Dock Safety (DGDS) under The Ministry of Shipping

International Maritime Organization (IMO) under United Nations

VARIOUS REGULATIONS / REQUIREMENTS:

The different agencies have framed various regulations under their purview to promote industrial safety and environmental protection in the hydrocarbon industry.

PETROLEUM ACT , 1934

The statutory requirements of the petroleum are governed by petroleum Act, 1934 and petroleum Rules 1976 under the jurisdiction of chief controller of Explosives.

Petroleum Rules of 1976 deal with the safety guidelines / regulations for :

ImportTransportStorageRefiningBlendingTesting of Petroleum/ products

The petroleum rules, 1976 detail the procedures and safety norms to be observed for approval of:

containers,

import,

delivery and dispatch,

loading,

transport,

storage, refining and blending of petroleum, testing and maintenance of pipelines,

Transport by pipelines

Transport by ships/vessels in bulk

Construction of tanks

Design of Containers

Manufacture of Safety Fittings etc.

THE INDIAN EXPLOSIVES ACT, 1884

The compressed or liquefied gas filled in containers under pressure are notified by the Government of India as explosives and brought under the purview of explosive act., 1884 in 1938.

Various rules under this Act are:

(1) INDIAN EXPLOSIVES RULES, 1981

These rules regulate the manufacture, possession, use, sale, transport & export / import of all types of explosives used for various purposes like mines / rock blasting etc.

(2) THE STATIC AND MOBILE PRESSURE VESSELES (SMPV) RULES, 1981

These rules stipulate various safety guidelines for the storage and transport of compressed and liquefied gases filled in pressure vessels.

(2) THE STATIC AND MOBILE PRESSURE VESSELES (SMPV) RULES, 1981 (Cont……..)

Under these rules, the storage & transport vessel should be designed for specific purpose (gas / oil) , maximum operating temp. & pressure, correct material of construction, capacity, shape, size etc. according to IS 2825 or any other approved code.

The Chief Controller of Explosives should approve the same.

The vessel should be fabricated by an approved fabricator and should be installed as per the safety distances stipulated in the rules. The pressure vessels & its fittings should be tested on regular basis.

(3) THE GAS CYLINDER RULES, 1981

These rules pertain to the filling, storage, handling & transportation of gases in gas cylinders exceeding pressures of 1.5kg/cm2 at 15C or 2.5kg/cm2 at 50C

The rules regulate the manufacture of cylinders, valves & regulators, marking, stamping and colour coding of cylinders, storage, handling, transportation of gas cylinders, testing of cylinders and also the procedure for appointing competent person authorized to undertake the testing & inspection of gas cylinders.

THE FACTORIES ACT, 1948

The provisions of this act are administered by the Chief Inspector of Factories in the respective state.

Each state has its own factories rules. The act was revised in 1987 to include hazardous chemical factories. Some amendments were brought in the factories rules of many sates in 1995.

The Factories Act make the occupier of a factory fully responsible for maintaining the plant and providing the systems of work that are safe and without any risks to the health and safety of the workers and general public.

The general responsibilities of occupier of a factory are:

Declaring safety policy of the organization

Providing the Material Safety Data Sheet (MSDS) of each hazardous chemicals

Every factory should have a well written on-site Emergency Plan, clearly defining the role of different persons in case of an emergency.

The Emergency Plan should be updated from time to time. To maintain the limits of exposure of chemicals and toxic substances ( below the limit prescribed under the rules) .

Disclosure of information to workers, public and authorities. This should include declaration of dangers / health hazards and measures to overcome such hazards.

A safety committee having equal representation of workers and management should be in place. The meeting of this committee should be held at least every quarter.

Medical checkup of the workers once before the employment and once every six months for health status in case of specific health hazards.

Setting up of medical / occupational health center equipped with equipment and qualified medical personnel.

Inspection , testing, examination and certification of equipment, vessels etc. by competent persons approved by CIF ( Chief Controller of Factories).

Permit to work system should be in place with approved safety and rescue equipment. All work associated with entry or work in confined spaces, working at heights, hot works, cutting and welding, excavation and other dangerous activities should have predetermined safe work procedure and should be undertaken under a written work permit signed by a qualified supervisor.

Provide adequate fire protection system as per rules.

An emergency communication system – alarm, siren etc. should be in place and everybody should know what to do in case of an alarm.

Safety manual containing the different safety procedures applicable to the installation should be available to the workers.

Providing Personal Protective Equipment to workers depending on the nature of hazard involved.

Display necessary precautionary notices and instructions at prominent places to educate and warn the workers and visitors against the hazard involved.

Appointing a qualified safety officer in the premises as per rules.

Providing welfare amenities like drinking water facilities, washing facilities, mess room, toilets etc.

Sending any accidental report and notice of any poisoning or occupational diseases

ENVIRONMENTAL LEGISLATION:

Sustainable development and environmental legislation are important issues for the development of the society.

GOI enacted the various environmental legislations related to industrial projects/ activities as below: The Water (Prevention and Control of Pollution) Act, 1974

The Water (Prevention and Control of Pollution) Cess Act, 1977

The Air (Prevention and Control of Pollution) Act, 1981

The Environment ( Protection) Act, 1986

The Environment ( Protection) Rules , 1986

Manufacture, Storage, and Import of hazardous chemicals Rules, 1989

Hazardous Waste management ( management and handling) Rules, 1989

Biomedical Waste (management and handling) rules, 1998

The Public Liability Insurance act, 1991 and the public liability insurance rules, 1991

The Water (Prevention and Pollution) Act, 1974:

This is enforced by SPCBs & by CPCB in Union Territories. It guides the industries as below:

(1)To obtain consent from SPCB/CPCB by making an application giving details of all information regarding manufacturing processes, raw materials used, effluent characteristics, generation sources and quantities, water pollution control facilities/ treatment.

(2) To comply with the specific standards for effluent treatment and disposal.

(3) Renewal of consent

The Water (Prevention and Pollution) Cess Act, 1977 including Cess Rules:

This is enforced by SPCBs & by CPCB in Union Territories. The obligations of the industry include:

(1)To have provision of meters to measure water consumption and treated waste water disposal.

(2) To submit returns stating monthly water consumption, quantity of waste water treated along with the analysis of water.

(3) To make payment of Cess as per the rates. On fulfillment of all conditions, some rebates in the cess are allowed. Higher rebates indicate better performance.

The Air (Prevention and Control of Pollution) Act, 1981 including Rules:

This is enforced by SPCBs & by CPCB. The obligations of the industry include:

(1) To obtain consent from SPCB/CPCB by making an application detailing all the information about manufacturing processes, raw materials used, generation of air pollutants & pollution control facilities provided.

(2) To comply with stipulated standards for pollutants like SPM, SO2, NO2, ambient air quality, noise levels etc.

(3)To submit returns to SPCB/CPCB (4) Renewal of consent

Environment ( Protection) Rules, 1986:

This is enforced by MoEF. The obligations of the industry include:

(1) To comply with the emission standards.

(2) To submit yearly environmental statement to SPCB/CPCB.

(3)To analyze emissions for specific pollutants and submit regular returns to SPCB/CPCB (4) To use of best technology for pollution control.(5) To maximum Reuse & Recycle of resources.(6) To have facility for treatment of waste water. (7) Renewal of consent

Manufacture, Storage & Import of Hazardous Chemicals Rules, 1986:

This is enforced by State Factory Inspectorate along with SPCB/CPCB. The obligations of the industry include:(1) To identify major hazards and take preventive measures.

(2) To demonstrate safe operation/emergency preparedness while handling hazardous chemicals.

(3)To ensure proper labeling of containers. (4) To prepare onsite emergency plan & conduct mock drills regularly.(5) To disseminate information related to hazardous chemicals to people of vicinity.

Manufacture, Storage & Import of Hazardous Chemicals Rules, 1986: (Cont……..)

(6) To prepare safety reports in case of exceeding threshold quantities of hazardous chemical storage.

(7) To notify sites in case of use of hazardous chemical storage exceeding threshold quantities.

The Hazardous Wastes(Management & Handling) Rules, 1989 : Enforced by SPCB/CPCB.The responsibilities of the Companies are:

(1)To obtain an approval letter for handling of hazardous wastes.

(2)To submit all information including quantity , waste category, generation rates & safety precautions in handling, transportation safety, treatment procedures and disposal methods to SPCB/CPCB & maintain records(3) To comply with the norms set in approval letter.(4) To of hazardous wastes generation, treatment & disposal & submit yearly returns.

Bio-Medical Waste(Management & Handling) Rules 1998 : Enforced by SPCB/CPCB.The responsibilities of the Companies are:

(1)To ensure that bio medical waste is handled without any adverse effect to human health & environment

(2) To have biomedical waste treatment facility.(3) To have facility for segregation & labeling of wastes .(4) To submit report about categories and quantities of wastes handled & maintain records.(5) To report any accident during handling & transporting of wastes.

The Public Liability Insurance Act, 1991 :

To provide relief to affected persons by accidents involving hazardous chemicals. The rules empower the District Collector to verify accidents & provide relief.

The responsibilities of the Companies are:

(1)To draw an insurance policy.

(2) To contribute to relief fund.(3) To follow the orders of DC in case of accident.(4) To do correct labeling of containers & follow safety precautions during handling/ transportation of hazardous chemicals

THE INDIAN BOILERS ACT, 1923

The Central Government and the State Government independently, except Jammu and Kashmir where this act does not apply, frame the act . Each state has its own boilers regulations & the owner of boiler (a closed vessel exceeding 22.75l capacity used exclusively for steam generation under pressure) has to register his boiler under this act. Chief inspector of steam boilers in the state is the registering authority.

The act stipulates requirement for safety of steam boilers and steam pipes(254 mm – internal dia).

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THE INDIAN ELECTRICITY ACT, 1910

Formulated by The Central Electricity Board. The objective of the I.E rules (1937,1956) is to regulate the generation, transmission, distribution and use of electricity in a safe manner.

The rules are enforced in each state by the Chief Electrical Inspector of the state.

THE OIL MINES REGULATIONS, 1984 All oil and gas exploration , drilling, production and transport facilities including general safety and health education are governed by these regulations under the Director General of Mines and Safety (DGMS).

THE INDIAN AIRCRAFT RULES, 1937 An installation, which is in the proximity of the Aerodromes, is covered under the purview of this rule.

It is mandatory that clearance be obtained from the National Air Port Authority of India, under the ministry of civil aviation, while planning to any tall structure or building.

Air warning lights are stipulated in the rules to be complied with by owners of such buildings.

INTERNATIONAL MARITIME ORGANISATION:

Some important milestones achieved are:

Convention on the safety of life at sea in 1974

• International convention for prevention of pollution from ships in 1973/78

• Convention on standards of training, certification and watch keeping for sea farers, 1978

DOCK WORKERES (SAFETY, HEALTH AND WELFARE) ACT, 1986

The dock workers (safety, health and welfare) regulations were framed in 1990 under the above mentioned act.

Factory inspectorate does not have any jurisdiction on the ports and docs. Director general of Dock safety enforces safety requirements at port/docks where crude and petroleum products moving through ships and barges are handled.

ATOMIC ENERGY ACT, 1962

The atomic energy rules were framed in 1971(revised in 1996) under the atomic energy act, 1962.

Under these rules, Atomic Energy Regulatory Board, AERB under Bhabha Atomic Energy Commission, regulates the use of any radioactive source in the country.

Radioactive sources are used in many petroleum installation in radiography equipment, x-ray machines and smoke detectors.

The use of any radiation (radioactive) source including its storage, handling transportation and disposal must comply with the statuary requirements of AERB.

Any installation using radiation sources must have an authorized Radiological Safety Officer ( RSO) trained validated and certified by radiation protection service division of Bhabha Atomic Energy Commission.

The RSO liaisons with AERB on all matters concerning radiation sources.

ATOMIC ENERGY ACT, 1962 (Cont…….)

DOCK WORKERS ( SAFETY, HEALTH AND WELFARE) ACT, 1986

The dock workers (safety, health and welfare) regulations were framed in 1990 under the above mentioned act. factory inspectorate does not have jurisdiction on the ports and docks.

Director general of dock safety enforces safety requirement at ports/ docks where crude and petroleum products moving through ships and barges are handled.

MOTOR VEHICLES ACT, 1988

The transportation of hazardous products by road is governed by Central Motar Vehicles act, 1988, salient features of the rules include:

Educational qualifications of the drivers of the goods carriages carrying dangerous or hazardous goods.

Every drivers of such vehicles must have passed mandatory three days training course from a recognized school in addition to having his heavy vehicle driving license.

Every vehicle carrying hazardous goods must display mark of the class label appropriate to the type of dangerous goods.

The vehicle should be marked emergency information panel at three places on the vehicle.

His panel contains products technical name. UN identification number, HAZCHEM code. Emergency phone number etc.

Every vehicle carrying hazardous goods must be equipped with the prescribed safety equipment for the preventing fire, explosion or escape of hazardous goods.

The vehicle should be fitted with a spark a spark arrester and a tech graph ( an instrument to record the lapse of running of the vehicle, time, speed maintained, acceleration/ declaration et

MOTOR VEHICLES ACT, 1988 (Cont……)

OIL INDUSTRY SAFETY DIRECTORATE:

•Oil industry safety directorate , OISD is an advisory body under the ministry of petroleum and natural gas.

•Set up in the 1986 after Bhopal disaster, the directorate advises the oil and gas industry in India on all matters of health , safety and environment.

•All public sector ( PSU) oil companies are members of OISD. Private oil companies can also become members in case they desire.

•Unlike other regulatory agencies, OISD helps the member oil and gas companies to enhance the level of safety through self regulation.

•OISD has published a number of standard/ recommendations practice in sitting of petroleum operation , philosophies, inspection, maintenance, fire protection etc.

OIL INDUSTRY SAFETY DIRECTORATE: (Cont….)

•It is obligatory for the member companies to use these standard and recommended practices for new installations and installation in operations.

•Many other statuary agencies like CCE and other CITE OISD standards/recommended practices in their procedure and requirements.

•OISD has also published guidelines for internal and external safety audits. Based on these guidelines, formal safety audits of oil/gas installations of various PSUs under Ministry of P & NG are conducted periodically by an external team under the leadership of OISD.

•Petroleum organizations can use these guidelines for their own internal audits. OISD has also made a model disaster management plan that can be used by an installation as guidelines for developing its own disaster/ emergency management plan.

TARRIF ADVISORY COMITEE:

Tariff advisory committee, TAC, is an advisory body formed to regulate rates, terms and conditions of business of general insurance companies in India.

TAC approves and monitors various fire fighting facilities and electrical installations in the industry.

Fire fighting manual first brought out in 1903 by Calcutta fire association was revised, updated and issued by TAC in 1982 in two parts- Part I and part II.

These manuals lay down guidelines for design and operation of private fire fighting facilities to be maintained by the industry.

These guidelines have been used extensively in petroleum installations.

Based on the degree of compliance to the recommendations of these manuals. TAC makes periodical inspections of those installations where rebates have been given.

PERMISSIONS AND APPROVALS FOR NEW PROJECTS:Before setting up any oil or gas installations, the folowig statuary approvals/permission have to be taken by the organization.

Some of these approvals/ permission are also applicable for undertaking a major expansions or revamp of existing installations.

UNDER FACTORIES ACT-FROM CIF

Permission to construct, extend or take into use any building as a factory.

Approval of site and building plans

Approval of site ( only for hazardous process units) by state site approval committee

Certificate of stability of factory building

Application for registration and notice of occupation

Application for license/ renewals f license of a factory.

UNDER ENVIRONMENT PROTECTION ACT- FROM MOEF AND STATE PCB’S

•Notification of site in respect of hazardous chemicals

•Environmental impact assessment

•Environmental clearance from ministry of environment and forests

•NOC from state pollution control board

•Consent for discharge of trade effluents

•Consent for operations of plants ( in air pollution control areas)

•Authorization for handling hazardous waste in quantity exceeding regulatory values.

UNDER EXPLOSIVES AND PETROLEUM ACTS- FROM CCE

License for manufacture, possession, use, sale, transport and importation of explosives

License to import/store petroleum

License to carry petroleum by land license for filling and possession of gas cylinders with compressed gases

License for transporting cylinders filled with compressed gas

OTHER APPROVALS/PERMISSIONS/CLEARANCES

Beside the above, permissions, approvals/clearances consent from other agencies listed below have to be taken

Certificate of authorization for use of boilers from the state’s chief electoral inspector

Public liability insurance by owners handling hazardous substances

Authorization from BARC (under the ministry of atomic energy) for use of equipment/ instruments using radiation sources.

REGULATORY COMPLIANCE:

No doubt, as various regulations discussed above go in a long way to increase the industrial safety standards, which is very important for hazardous industry like petroleum operations.

But the regulations will be useful and bring results only when they are implemented in the right spirit.

It is the responsibility of the owner/ occupier of an installation and their authorized officials to ensure that the requirements of various regulations are fully complied with.

Besides taking the necessary approvals, permission, consents and clearances from the concerned authorities and maintaining the conditions specified therein, it is also required by some of these agencies to send them regular reports of compliance.

In the recent past, the law has put lot of accountability and liability on the part of senior management of an organization in the compliance of various regulations, and closure of installations.

The owner/occupier and other officials may even be put behind the bars in serious violations.

Even the public awareness about the safety hazards and environmental pollution from industrial activities has increased significantly over time.

It is very easy these days for any person to file a PIL ( public interest litigation) suing an organization for violation of any regulatory requirement.

The affected organization may get involved in lengthy litigation casting lot of money harassment and loss of image and reputation.

The management of every installation therefore should ensue that the required regulations are fully complied with.

LIMITATIONS OF REGULATORY AGENCIES:

Needless to say that over the years the regulatory agencies have played a significant contribution in the promotion of industrial safety in the petroleum industry in India.

With due respects to their role, it may be worthwhile to look into some of the inherent limitations of these agencies. and this is the most important reasons why organizations should have voluntary own self discipline and regulation to have ahigh level of safety standard.

Some limitations are:

MINIMUM REQUIREMENTS:

Most of the regulatory agencies lay down rules/regulations which are the minimum basic requirements that are very important in the safe design and operations of industrial units.

They do not go into details of so many other requirements pertaining to safe management of an installation.

For example, sound and safe engineering practices are equally important but are not addressed in these requirements.

CHANGE IS SLOW:

Technological developments and social awareness bring in new problems and challenges to the industry.

Adequate protection of society against new technological hazards would depend upon the speed with which these regulatory agencies can identify the new problems and change the rules.

Since the provisions of these agencies cover a wide spectrum of industry and any amendments has to go through a lengthy legislative procedure, the statuary and law enforcing agencies are generally slow in updating their rules and requirements to keep pace with technological and social changes.

Some of the requirements set forth in the regulations long ago may not be relevant in the present context. For example, Factory Act, since its inception in 1948, underwent amendments only in 1954,1976 and 1987.

Petroleum rules were last revised in 1976. Environment protection act came into being only in 1986.

The Indian electricity rules and Indian Boiler Regulations have not seen any revision for more than 15 years.

INADEQUATE INFRASTRUCTURE:

Many regulatory agencies do not have and adequate facilities and manpower to monitor and control the safety performance of the industry on a continuous basis.

For example, the number of boiler inspectors in most states is far less than required to undertake and meaningful inspection visits to a large number of industrial units under their jurisdiction.

Further, with the background and training that many factory inspectors have, their visits to factories are restricted to checking the basic amenities like first aid boxes, machine guards, personnel protective equipment, drinking water and canteen facilities, etc.

They probably do not have right training and background for identifying many serious process hazards, which may not be obvious.

It is only after Bhopal disaster that some improvements withy respect to quantity and quality of inspectors in these agencies have taken place.

NOMINAL PENALITY FOR VIOLATIONS:

Some regulatory agencies provide for penalty to the industry for violating the rules and compensation to the workers in case of injuries and fatalities.

Though in the recent past there have been some changes in the amount of these penalties and compensations, still these are nominal in most cases, with the result that there is a little pressure on the industry compelling them to spend more money in making an installation inherently making an installation inherently safer and non-polluting.

GENERAL AND SUBJECTIVE PROVISIONS:

Certain provisions of regulatory agencies are very general and subjective in nature.

This leads to ambiguities and confusions in their interpretations by users and the inspectors.

Besides it is observed that a large number of cross references to a particular provision of the regulation are mentioned.